Yonhap
Lee Joon-seung
6/25/2007
A factory-apartment being built in the inter-Korean industrial complex in Kaesong, North Korea will be opened to South Korean clothing and stuffed goods manufacturers in September, a state-run industrial complex operator said Monday.
The 21 billion won (US$22.6 million) manufacturing and residential facility will house 33 companies and 2,500 workers from both South and North Korea, the Korea Industrial Complex Corp. (KICOX) said.
“More than 100 companies want to use the factory apartment,” said KICOX President Kim Chil-doo, indicating the level of interest by local companies. He said one of the chief merits of moving operations to the complex is cheap labor costs of around US$58 a month.
Kim said wages can only go up by less than 5 percent on an annual basis in accordance with pre-set agreements.
Most companies that wanting to use the new facilities are small- and medium-sized enterprises struggling to deal with the flood of cheap imports from China and Southeast Asia.
Construction on the five-story building began in May 2006, and the facility includes manufacturing areas, living quarters and a training center for North Koreans.
Kaesong park is the most prominent outcome of inter-Korean rapprochement that began with the landmark 2000 summit between their leaders.
At present there are 23 companies operating in the special economic cooperation region and 16 in the process of starting operations there. About 260,000 square meters are currently being used, but this is being expanded to 3.3 million square meters by the end of the year. The extra space could hold 300 companies.
KICOX said the factory-apartment has considerable advantages over other plants in Kaesong since it provides comprehensive support for small companies under a single roof, cutting operational costs in electricity, water and training of North Korean workers.
The corporation, which operates 32 state-run industrial parks in South Korea, said companies are expected to move into the factory-apartment in August ahead of the official opening.
