Archive for the ‘Companies’ Category

North Korean products in department stores on the rise

Friday, February 22nd, 2013

Institute for Far Eastern Studies (IFES)
2013-2-22

The number of North Korean made products is increasingly on the rise at North Korean department stores. Reportedly, 70 percent of the merchandise on the shelves in North Korea’s largest department store, Pyongyang Department Store No. 1, is North Korean made.

Japan-based pro-North Korean newspaper Choson Sinbo reported on February 13 that the bestselling item is apple juice made from the Taedong River Combined Fruit Farm, sold from the kiosk located on the first floor of Pyongyang Department Store No. 1. Sonhung Food Factory products, especially bread and confectionaries, are also said to be very popular.

The newspaper commented that the regularly held product exhibition shows at the department store have created competitive environment for local factories and companies and contributed to the production of high-quality products. They also emphasized that exhibition of products began on account of recommendations of the former North Korean leader, Kim Jong Il.

It further added, “The product exhibition invites participation from light industry factories and enterprises and its affiliated units from central and regional areas as well as department stores in Pyongyang and general stores that sell industrial products.” It commended the expos to be well received by the local people for filling the shelves with local products.

The first exhibition began in December 2010, and the second and third exhibitions were held in July 2011 and January 2012, respectively. Selling of Taedong River Combined Fruit Farm products began from the third exhibition.

In an interview with Choson Sinbo, Kim Miyoung, commerce director of Pyongyang Department Store No. 1, said the following: “Employees of the department stores and our patrons never imagined a day like this would come where our department store shelves are filled with North Korea made products, especially when we were going through the difficult economic times.”

The news also reported the opening of North Korea’s first 24-hour pharmacy. Pyongsu Pharmaceutical, a joint venture company between North Korea and Switzerland, has claimed to have opened North Korea’s first 24-hour pharmacy, called Taedongmun Pharmacy, in Pyongyang last August. Pyongsu pharmaceutical joint venture company was established from September 2004 between InterPacific Group of Switzerland and Pyongyang Pharmaceutical Factory under the Ministry of Health of the DPRK. They both produce and sell pharmaceutical products in Pyongyang. Its homepage introduces nine operating pharmacies in Pyongyang. (See Pyongsu’s website for details: www.pyongsu.com.)

The first pharmacy by Pyongsu was built near the Pyongyang’s Arch of Triumph in 2006 and expanded the number of pharmacy to nine, including the Taedongmun Pharmacy. In addition, Kangan Pharmacy was highlighted in its website, boasting that all the pharmacists working at this pharmacy are graduates of Kim Il Sung University. It also boasts that it is the first pharmacy to have been equipped with blood testing equipment.

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Mansu Hill statue drama…

Monday, February 11th, 2013

UPDATE 3 (2013-1-10): Kyodo (via The Telegraph) solves the riddle of just why the Kim statues on Mansu Hill were covered up in October 2012 (See below)–a new version of the Kim Jong-il statue was put up. It replaced a statue that was erected in April 2012.

Below is a before/after comparison.

NKOREA_STATUE_COMP_2476186c

UPDATE 1 (2012-10-3): A reader sends in this image of the statues covered up.

Ruedeger Frank also publishes an image at 38 North.

ORIGINAL POST (2012-9-24):

Pictured above are satellite and ground-level images of the Kim Il-sung and Kim Jong-il statues on Mansu Hill. Although these statues were unveiled just this past April, word on the street is that they are once-again  hidden under a protective covering  that was placed on the site sometime in mid-September. Unfortunately, there are not yet any pictures of the new wraps.

Although it is unclear why the statues have been covered up, Occam’s razor tells me that they are doing some maintenance work of some kind.

On a related note, the Mansu Hill model replica at the newly constructed Pyongyang Folk Village is missing its Kim statues as well. North Korean television footage of Kim Jong-un’s visit to the newly-opened park revealed a Mansudae Grand Monument that looked rather hollow in the center owing to the absence of the Kim statues:

As we all know, official images of the leaders are produced exclusively by the Mansudae Art studio in Pyongyang’s Phyongchon District. Either the art studio has not gotten around to making miniature replicas of the statues on Mansu Hill or this exhibit will never have them.

I believe the latter is probably the case.

From an ideological perspective, miniature Kim replicas would not inspire the masses the way the real [large] statues are meant to. They would almost certainly cause confusion. Can you imagine bowing to a statue shorter than you? Actually from the television footage it is difficult to make out the scale of the site, but it is quite probable that even miniature statues would be larger than life-size.

From a fiscal perspective, installing real [miniature] Kim Il-sung and Kim Jong-il statues would be expensive for the park managers. In addition to the cost of commissioning the two statues, the park managers would have to begin treating this part of the park as an actual revolutionary site–with all the formality, expense and protocol associated therewith. I don’t think anybody wants that.

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Taepung International Investment Group allegedly dissolved

Friday, February 1st, 2013

According to Yonhap:

North Korea dissolved a well-known state-run company in charge of attracting foreign investment due to its unsatisfactory performance, South Korea’s Unification Ministry said Friday.

“Daepung International Investment Group seems to have been disbanded, probably due to poor performance,” a ministry official said in a briefing on governmental and personnel changes taken under the Kim Jong-un regime over the past year.

The country also broke up another extra-governmental organization in charge of trade promotion and foreign investment with its work believed to have been reassigned to the government’s Commission for Joint Venture and Investment, according to the official.

Daepung Group was established at the instruction of the North’s highest political body, the National Defense Commission, in January 2010 as a means to attract foreign investment.

The group oversaw the now-suspended joint tourist program in Mount Kumgang on the eastern coast of North Korea.

The cross-border program had served as a cash cow for the North before Seoul halted it in 2008 following the shooting death of a South Korean tourist at the resort.

Additional Information:

1. Previous posts on the Taepung Investment Group can be found here.

2. NK Leadership Watch has an excellend review of the organization here.

3. The “Commission for Joint Venture and Investment” is also known as the Joint Venture Investment Committee (JVIC). See JVIC posts here.

Read the full story here:
N. Korea dissolves state-run firm in charge of attracting foreign investment: gov’t
Yonhap
2013-2-1

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Felix Abt interview

Wednesday, January 16th, 2013

Felix Abt, author of A Capitalist in North Korea and founder of the DPRK’s Pyongsu Pharmaceutical Factory, did an online interview in which he discusses  some of the surprising quirks of living in North Korea…such as getting locked out of your LinkedIn account (we blogged about this back in March 2009).

Here is a blurb:

Is North Korea Now Open for Business?

Not quite. But Abt tells me he believes opening up to commerce has “become a more important priority” for the North Korean government over the past ten years.

“I’m getting a lot of proactive proposals from the North Koreans, which we haven’t experienced in the past, so there is quite a big change on that front,” Abt says. “My business partners in Pyongyang can use [file-sharing service] Dropbox, they can travel more often now, and more North Korean companies have been allowed, particularly in 2012, to interact with foreign ones.”

Still, obstacles exist for anyone seeking to do business in this most frontier of frontier markets.

Power cuts are frequent, infrastructure is crumbling, and sanctions remain strict. On the other hand, Abt says the hardships he encountered cemented deep personal bonds between him and his colleagues.

“We had to solve practical problems every day; it was a daily struggle that brought us close,” Abt recalls. “We worked hard together, but we also partied together, went to karaoke, had good dinners, went on excursions, and had fun together. I never had the feeling that I was an alien in their eyes or a potential enemy or a spy — the relationship was quite relaxed and friendly, driven by our joint goals.”

Abt and staff members celebrate International Women’s Day in Pyongyang (Photo: Felix Abt)

So, would he do it again?

“I like to go back from time to time to eat some good food and have a merry evening, but otherwise, of course, I am happy where I am now,” Abt says.

“Seven years is a long time.”

Read the full interview here.

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Mansudae ODG building Angkor e-museum

Tuesday, January 8th, 2013

UPDATE 3 (2013-1-8): NK News has an image of the new museum; explains some of the features it will contain; and reports that it will open in April.

UPDATE 2 (2011-11-26): Accoridng to AKP (Cambodia):

Cambodia has allowed the Democratic People’s Republic of Korea to build a cultural information centre (or welcome centre) in Siem Reap, the home of Angkor, as part of the government’s effort to attract more tourists, according to the Press and Quick Reaction Unit of the Council of Ministers.

In a meeting on Thursday, Deputy Prime Minister H.E. Dr. Sok An told the North Korean Ambassador H.E. Ri In Sok that Cambodia’s Apsara Authority is working with North Korean experts to build the centre, which will serve as a welcome centre for tourists who want information about Cambodia’s Angkorian history.

Officials of the Apsara Authority for the Protection and Management of Angkor and the Region of Siem Reap are working with 60 Korean experts and concerned institutions to ensure that the building design will feature the cultural values of both Cambodia and Korea.

The building, 70 metres in diameter and 124 metres in height, will be decorated with artistic works and drawings. Korean officials say that the world’s biggest artistic drawing will be displayed at the centre.

Dr. Sok An, who is also Minister in Charge of the Office of the Council of Ministers, told the ambassador that the centre will represent not only the image of the Democratic People’s Republic of Korea but also the good bilateral relations of the two Asian nations.

The outgoing North Korean Ambassador Ri In Sok, who is leaving Cambodia on Nov. 26 after a four-year term, told Dr. Sok An that North Korea wants unification with South Korea as soon as possible.

The ambassador was grateful to the deputy prime minister and the Royal Government of Cambodia as a whole for facilitating his diplomatic mission in Cambodia.

“I am pleased with the bilateral cooperation. I am pleased with the tremendous progress made by Cambodia over the past years,” said Ambassador Ri In Sok in the meeting.

The ambassador said the Democratic People’s Republic of Korea continues its good relations with the Royal Government of Cambodia thanks to the diplomatic legacy of the relations between His Majesty King Norodom Sihanouk, now retired, and the late Kim Il-Sung, leader of the Democratic People’s Republic of Korea.

Additional information:

1. Voice of America also picked up this story

2. NK Leadership Watch also covered the story.

3. The Mansudae Overseas Development Group (MODG) is also building/has already built an e-museum in Siem REap. Learn more here.

4. Here are previous posts on the DPRK and Cambodia.

UPDATE 1 (2011-8-3): Construction is underway on the project.  According to the Global Post:

A wall of royal blue sheet metal obscures the North Koreans’ operation from public view. When I approached the entrance, a man in a fedora and a tank top rushed over to slam the gate shut. A furtive look inside revealed fewer than a dozen scrawny workers and a scrub grass field still void of much construction.

Though local reports vary, North Korea will be paid between $10 and $17 million for some sort of monument or museum near the temples. The head of Cambodia’s culture ministry, Khem Sarith, confirmed construction of an “e-museum” but could not confirm the cost.

Nor could he explain why a country that offers its citizens scant electricity should win an “electronic museum” contract, especially after its monuments abroad have drawn both condemnation and ridicule.

The full story is well worth reading here:
North Korea propaganda unit builds monuments abroad
Global Post
Patrick Winn
2011-8-3

ORIGINAL POST (2010-4-27): According to the AFP (Via the Straits Times in Singapore):

A controlversial North Korean construction company is in talks to build an ‘e-museum’ of Cambodia’s famed Angkor temples, a senior official said on Monday.

Mansudae Overseas Projects wants to build a museum close to the temple complex that will feature a computer-generated simulation of the ancient monuments, Cambodian Culture Ministry secretary of state Khem Sarith told AFP.

‘They have plans to build an electronic museum detailing the history of Angkor Wat temples,’ he said, adding he supported the plans after discussions last week with a company delegation and North Korean ambassador Ri In Sok.

Previous work by the North Korean company building major monuments in African countries has been criticised for lack of transparency. Its 49-metre bronze Monument for the African Renaissance has caused outrage in Senegal over the sale of government land to finance the project and the president’s plan to keep 35 per cent of any profit it generates.

Mr Khem Sarith said the so-called e-museum would be ‘good for tourists to view the temples and then select the one that they want to see’. Studies and more discussion were still needed before construction could start on the digitally-rendered overview, Khem Sarith said. He said he would meet again with officials from the company in June to discuss the project further.

The 12th century Angkor Wat temple complex is Cambodia’s main tourist attraction. It is located in the northwestern province of Siem Reap, where the ancient Khmer empire built some 1,000 temples spread over 160 square kilometres.

I have pretty extensive list of Mansudae Overseas Development Group projects from across the planet.  If you are aware of a North Korean built project in your country, please let me know.

(Thanks to a reader)

Read the full story here:
‘e-museum’ of Angkor temples
AFP (Straits Times)
4/26/2010
John Cosgrove

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New statues of the Kims in Kanggye

Thursday, October 11th, 2012

UPDATE: A friend sent in a link to the video of the unveiling that appeared on North Korean television:

ORIGINAL POST:

Pictured above (Google Earth:  40.971557°, 126.588980°) the old Kim Il-sung statue in Kanggye, Jagang Province.

Satellite imagery is not recent enough to show the change, but KCNA reports that Kanggye City, the capital of Jagang Province, has received new statues of the deceased Kims:

Pyongyang, October 11 (KCNA) — Statues of President Kim Il Sung and leader Kim Jong Il were erected in Kanggye City, Jagang Province.

The statue of Kim Il Sung depicts him standing in his military uniform whose coat flying in the wind, his right hand held high and left hand taking a pair of binoculars. He seems to dynamically arouse the army and people of the DPRK to provide a turning-point in the Fatherland Liberation War. The statue of Kim Jong Il imposingly standing in his padded dress conveying so many stories about the Songun revolution depicts him with one of his hands placed on his waist. His face beaming with a broad smile looks as if he were wishing the great Paektusan power a rosy future.

An unveiling ceremony took place on Thursday.

Present there were Kim Yong Nam, Choe Yong Rim, Choe Ryong Hae, Kim Jong Gak, Kim Ki Nam, officials concerned, service personnel, officials and employees of the units who contributed to the erection of the statues, members of the shock brigades and people and school youth and children in the province.

The statues were unveiled by senior party, state and army officials and leading officials of the province.
A floral basket sent by the dear respected Kim Jong Un was laid before the statues.

Laid there then was a floral basket in the joint name of the Central Committee of the Worker’ Party of Korea, the Presidium of the Supreme People’s Assembly and the DPRK Cabinet.

Also placed there were a floral basket in the name of Jagang Province and floral baskets in the name of the party and power organs, bodies of different levels, enterprises, factories and farms, KPA units, etc. in Jagang Province.

All the participants paid tribute in profound reverence to the statues of Kim Il Sung and Kim Jong Il.

Kim Yong Nam, member of the Presidium of the Political Bureau of the Central Committee of the WPK and president of the Presidium of the SPA, made an unveiling speech.

He said the great Generalissimos paved the way of turning the province, which had been considered as unfit for human habitation, into a good place to live in and made sure that the province took the lead in the drive for building a thriving nation.

Recalling that it was the ardent desire of the people in the province to have statues of the great Generalissimos, he said the statues were erected in a brief span of time on the highest level thanks to their loyalty.

After being briefed on the statues, the participants looked round the statues.

A valued reader pointed out to me some some peculiar language (in the English version of the story). I point it out below:

He seems to dynamically arouse the army and people of the DPRK to provide a turning-point in the Fatherland Liberation War. The statue of Kim Jong Il imposingly standing in his padded dress conveying so many stories about the Songun revolution depicts him with one of his hands placed on his waist.

I have to laugh at the phrase “dynamically arouse”. Someday I will need to work that into a conversation.  And just what would you make of a statue of Kim jong-il “imposingly standing in his padded dress”? If only I was proficient with Photoshop…

This will be the 11th Kim Jong-il statue of which I am aware. At this point we can probably expect new Kim Il-sung and Kim Jong-il statues to go up in all of the provincial capitals.

All of these statues are constructed by the Mansudae Art Studio in Phyongchon, Pyongyang.

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New Kim Jong-il statue at MSS/SSD headquarters

Wednesday, October 3rd, 2012

KCNA ran the following headline on 2012-10-2: “Statue of Generalissimo Kim Jong Il Erected at KPA Unit [10215]“.

According to Ken Gause, KPA Unit 10215 is the military cover designation of the 국가안전보위부 — the Ministry of State Security (MSS) [a.k.a. State Security Department (SSD), National Security Agency (NSA), State Political Security Department (SPSD)].

Checking the Google Earth imagery, we can in fact see the statue under construction at the MSS headquarters in front of the General Bureau Building.

Pictured above (Google Earth:  39.074311°, 125.767690°): Tarps covering the newly unveiled Kim Jong-il statue. Image date: 2012-6-20.

You can see a video of the unveiling on North Korean television below. This is the first time, of which I am aware, that the MSS headquarters has been shown on television:

(UPDATE) NK Leadership Watch also covered the unveiling and provides additional information.

In related news, the Kim Jong-il and Kim Il-sung statues on Mansu Hill have been covered up for renovations. In his latest at 38 North, Ruediger Frank also publishes a photo.

All images of the Kims are produced by the Mansudae Art Studio in Phyongchon District, Pyongyang.

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North Korea presents favorable conditions to foreign investors

Monday, July 30th, 2012

Institute for Far Eastern Studies (IFES)
2012-7-27

The Beijing branch of the Joint Venture and Investment Committee of North Korea (JVIC), called the Choson Investment Office, announced on July 18 of various preferential conditions to foreign investors and employment conditions on its website.

The Choson Investment Office opened its doors this year and is the only overseas branch of the JVIC, in charge not only of securing foreign capital but cultural and science and technology exchanges and cooperation.

The website posted an article titled, “Problems Investors Face,” which provided useful information for foreign investors in a question and answer format.

In the article, the employment conditions for workers were included. The minimum monthly wage for workers in North Korea was set at 30 euros or about 42,000 KRW. In addition, foreign companies must pay 7 euros to each employee separately as social insurance. Overtime pay also needs to be paid and at the event of work related injuries or illness, the company is responsible for handling the situation with its board of directors.

In comparison, the minimum monthly wage for North Korean employees in the Kaesong Industrial Complex (KIC) is 110 USD or about 125,000 KRW.

As for preferential tax policies, foreign-capital companies that are not joint venture are exempt from certain taxes including tariffs on exports and resource tax for the development of mines.

North Korea will bear the land use tax, which is 1 euro per square meter, and China and other foreign investors will have no restriction for mining the underground resources.

The income tax rate for the foreign capital companies was specified at 25 percent and business tax between 2 to 10 percent will be collected from transportation, power, commerce, trade, finance, insurance, tourism, advertisement, hotel and entertainment industries.

Power is the main concern for most foreign companies and it will be provided at 0.053 euro per 1,000 kilowatt. The DPRK’s central trade guiding organ will oversee the setting of prices of goods while the trademark rights will belong to the company.

The DPRK’s Joint Venture and Investment Committee was expanded and reorganized in July 2010 from Joint Venture and Investment Bureau, with main activities centered around Hwanggumpyong Island and Rajin-Sonbong development.

The main agents for foreign currency earnings are the cabinet, military, JVIC, and Daepung International Investment Group*. Most of the trading companies are affiliated with one of the four groups.

In March, JVIC announced through the KCNA that “As the investment environment is favorably changing, joint venture and investment contracts are increasing. Investment interests from large companies are rising especially in our abundant rare-earth and underground resources as well as building railroads, roads, and power plants.”

*IFES and Choson Exchange previously discussed the merger of JVIC and “Daephung”

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Insurance in the DPRK

Thursday, July 12th, 2012

Jakub Rehor and Geoffrey See of Choson Exchange post interesting information on insurance in the DPRK:

According to the Choson Exchange:

In the planned, state-controlled economy of North Korea, familiar concepts (including insurance) acquire a very different meaning. In a market economy, insurance coverage indemnifies individuals or corporations for losses suffered due to natural disasters, accidents, sickness, or death. In North Korea, what is called “insurance” functions as a fundraiser for certain entities in the government.

There are two kinds of insurance products in North Korea, individual and enterprise insurance. Both are compulsory and are administered by KNIC (Korea National Insurance Corporation). Compulsory individual insurance is deducted automatically from salaries, and is used to fund the state-run healthcare system. Individuals cannot file claims under this insurance; all payments go into the healthcare system to cover its costs and to other state-directed uses. This individual insurance program was originally administered by Korea Central Bank, but parts of it were moved to KNIC where it formed a new department.

Individuals do not have the option of buying property or life insurance in DPRK. Only state-owned enterprises can use property insurance. Compulsory enterprise insurance covers property losses from all major perils (there is exclusion for war). There are no separate policies or riders for windstorm, earthquake, flooding, etc. Instead, policies specify coverage by type of property (animal insurance, machinery insurance, etc.)

Pricing is set without regard to individual risks and loss history. Rather, insurance operates on a pooled basis, with the goal of roughly matching premiums with claims and administration costs. There are no reserves and the state absorbs any losses or profits. As a result, KNIC has no incentive to care about profitability or correct pricing (and, presumably, service) for local insurance operations priced in North Korean won.

There is no independent regulatory authority in DPRK overseeing KNIC’s activities. In theory, the Central Bank and Finance Ministry should be involved, but in reality they don’t have the expertise or political backing. The only oversight of KNIC comes from the party which provides mainly political supervision.

Given the pooled nature of the compulsory policies and lack of risk-based pricing, KNIC acts mainly as an administrator, collecting premiums and disbursing payments. In this position it functions as a revenue generator for the government via two channels:

1. It fails to pay market replacement value of losses. Claims are settled at official government prices which do not reflect market reality.

2. It has been alleged that KNIC has been involved in reinsurance fraud. Media reports claim that European reinsurers write policies for KNIC which then submits false claims, or retains a portion of the claim settlement payments rather than passing it on to the insured.

The existing insurance arrangements in DPRK are clearly inadequate for the needs of foreign joint ventures operating in the Special Economic Zones. If North Korea hopes to attract foreign investment, it needs to modernize its insurance system to bring it into line with expectations of outside investors.

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UK energy company pulls out of North Korea

Wednesday, May 16th, 2012

By Michael Rank

Independent British energy company Aminex PLC has withdrawn from North Korea, citing ‘”the volatile and unpredictable politics of the area”, just two years after signing a deal covering a 50,000 sq km area off the country’s east coast.

Aminex said it was “in the best interests of shareholders for the Company to withdraw from the Korean exploration programme and not participate in seismic acquisition. This decision will allow Aminex to focus on growing its African portfolio.”

The company first signed an agreement for co-operation in oil and gas with the North Korean government in 2004, but this failed to make progress. In 2010 it introduced a new foreign partner, Singapore-based Chosun Energy Pte Ltd, which provided finance for the initial stages and a regional base in Singapore. Aminex said at the time that “despite challenging international politics,” it had “succeeded in maintaining strong relations with the Korean authorities”, resulting in the production sharing contract signed in May 2010.

But industry sources said Stuard Detmer, who was made Aminex CEO last September, was less enthusiastic about North Korea than his predecessor Brian Hall, who remains executive chairman, and this had contributed to the company’s decision to pull out of the DPRK.

Aminex’s main focus is now on Tanzania, where in February it made the first gas discovery in the onshore Ruvuma basin, having also disposed of an oilfield in Texas.

Aminex said in 2010 that the agreement “involves reprocessing and reinterpretation of old seismic data plus acquisition of new marine seismic data during an initial period. Licence holder] Korex believes that the East Sea has great potential for significant discoveries of oil and gas, while recognising the political challenges in the region and the need to ensure that any international sanctions are strictly observed.”

See previous posts about Aminex here.

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