Kaesong companies eye Vietnam

South Korean enterprises that used to do business at the Kaesong Industrial Complex are heading to Vietnam.

Representatives of the Korea Trade-Investment Promotion Agency (Kotra) and 19 companies affected by the closure of Kaesong will travel to Vietnam to investigate the investment environment from April 11-15.

“We tried hard to provide as much information as possible to the enterprises so that they will have a clear understanding before making decisions about whether or not to enter the Vietnamese market,” said Yoon Hyo-choon, a director at the Kotra said in a press release on Thursday.

According to Kotra, a total of 46 out of 51 companies that responded to the survey conducted in February said they are interested in doing business in Vietnam.

The agency added that Vietnam has a high productivity rate with relatively low labor costs and strong distribution channels, and that ties between the two countries might strengthen if Korea joins the Trans-Pacific Partnership, of which Vietnam is already a member.

The minimum wage in Vietnam varies by region, but Kotra said companies can hire a local worker for up to $350 a month. Rents are also relatively cheap in Vietnam, between $20 and $100 per square meter.

Kotra set up a service center for South Korean enterprises that operated at the Kaesong Industrial Complex starting from the end of February.

Seoul shut down the Kaesong Industrial Complex, which was the last remaining economic cooperation project between the two Koreas, in February, after North tested a nuclear bomb the month before.

Last month, the government unveiled plans to ease the financial burden on companies affected by the closure.

The government said it will postpone principal payments on loans and extend the maturity date for those with existing loans, and that it would give grants to companies that are planning to open new plants in the nation’s metropolitan areas last month.

BY KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]