Kaesong companies stand to lose millions over shutdown

Posted on : 2013-04-10 15:29 KST Modified on : 2019-10-19 20:29 KST
Many of them uninsured, companies seeking some way to restart production in joint industrial complex
 Apr. 9. Operations at the complex have been disrupted since Apr. 3 when North Korea enacted an entry ban for South Koreans. (by Kim Bong-kyu
Apr. 9. Operations at the complex have been disrupted since Apr. 3 when North Korea enacted an entry ban for South Koreans. (by Kim Bong-kyu

By Lee Jeong-hun, staff reporter

Tenant businesses in the Kaesong Industrial Complex are despondent after North Korea pulled out its workers amid increasingly frigid relations with Seoul.

“There have been problems in the past, but this is first time the workers haven’t come to work,” said the president of one company while attending a Apr. 9 meeting of businesses to figure out a solution.

“It’s pretty much over now,” they continued. “With this kind of disruption to production, it will be impossible to regain [customer] trust even if things start moving again.”

If the complex is shuttered, tenant companies stand to shoulder losses of up to tens of million dollars each. As of late December, the 123 businesses had received government approval for investments totaling 579.8 billion won, or about US$509 million. Sixteen of them, including Taesung Industry and Romanson, had investments of more than 10 billion won (US$8.7 million). The money will have to be written off if the Kaesong complex closes.

Ninety-three of the companies currently have economic cooperation insurance, but even then the maximum payout is 7 billion won (US$6.1 million). The other 30 companies have no insurance.

After meeting for around one hour, the businesses held a press conference, where Corporate Association of Gaesong Industrial Complex vice chairman Yu Chang-geun made a plea for the survival of the businesses, which he said were like “a patient in critical condition.”

“Don’t let the hospital and guardian mistreat the patients because of the treatment costs,” he said. “Give them the strength they need to survive.”

Employees also voiced resentments toward North Korea as well as the South Korean government. The head of one business said, “I have a bone to pick with the way the current administration’s one-note focus on a hard line against North Korea has made the situation worse. I asked that this be included in our appeal, but there were objections and it was voted down.”

Hyundai Asan, which holds developmental rights for the complex, expanded its situation room into an “emergency countermeasures committee.” In addition to its development efforts, it also runs basic facilities and repair shops in the area.

The president of Hyundai Asan, Kim Jong-hak, said he could not contain his dismay at the critical situation of the complex.

“As the ones who first started this complex and bear responsibility for its development, we will do everything in our power to see it through and bring back normal operations,” he said.


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