Archive for the ‘Light Industry’ Category
Pictured Above: Ryongsong Foodstuff Factory, Ryongsong District, Pyongyang (Google Earth)
According to the Daily NK:
The price of a North Korean own-brand “Choco Pie” fell to just 500 won in domestic markets following news that the Kaesong Industrial Complex (KIC) was to reopen, Daily NK has learned. The local version of the chocolate snack, which is made by Orion in South Korea, had previously risen to 3000 won on the back of the protracted KIC closure.
A source in Pyongyang reported to Daily NK on the 19th, “Sometime around May, Yongseong [Ryongsong] Foodstuff Factory in Pyongyang started selling ‘Choco Pies’ in the markets. People hadn’t seen a Choco Pie since Kaesong stopped, so their reaction was really something.”
“People were surprised because the packets said ‘Choco Pie’ and ‘Choco Rice Cake’ [a similar product with a glutinous rice center], and they couldn’t tell the difference between them and those from the ‘neighborhood below’ [South Korea] unless they checked closely,” the source went on. “Sure, people could tell they weren’t the real thing as soon as they ate them, but they were still pretty satisfied.”
According to the source, after South Korean Choco Pies disappeared from North Korean markets following the closure of the KIC, domestic traders started looking into importing the original South Korean and similar Chinese versions of the popular treat. However, the cost and difficulty of doing so meant that very few ended up crossing the border.
Therefore, attention turned to domestic production. The source explained, “Production volumes were low at first, and the state tried to control the flow of the product into the markets. They were 500 won a piece at the end of the first month; but that had risen to 3000 won by the end of last month. But the price sank back down upon news of the KIC re-start.”
“As soon as Choco Pies stopped coming out of the KIC, Yeongsong Foodstuffs Factory moved quickly and must have made quite a bit of money,” he guessed. “They were trying to imitate the South Korean pies but the product was way too sweet, which is partly why the price collapsed on the news of Kaesong.”
Only 60% (32,000) of the pre-closure North Korean workforce (53,000) returned to work when the KIC re-opened for a “trial run” on September 16th. At the same time, South Korean businesses, many facing financial difficulties after five months of nonproductive shutdown, have reportedly reduced the quantity of Choco Pies and other snacks previously distributed to workers. It is unclear what effect these circumstances could have on the price of goods flowing out of the KIC over the longer term.
Read the full story here:
NK Choco Pie Price Falls on KIC News
I am unable to find an article about this in either Rodong Sinmun or KCNA, but according to Yonhap:
North Korea completed construction of a brand new brewery in Haeju city that has up-to-date production facilities, the communist country’s leading newspaper said Thursday.
The Rodong Sinmun, an organ of the ruling Workers’ Party of Korea, said the brewery has fermentation, filtering, cold storage and bottling facilities that will allow it to produce alcoholic beverages to benefit people.
It said trial runs have been successfully carried out and efforts are currently underway to secure production materials to make beer.
The latest report comes after microbreweries in the communist country such as Taedonggang Craft Brewery and Yanggakdo Hotel Microbrewery have received acclaim by some for making the best beverages on the Korean Peninsula and in Northeast Asia. The secret behind the taste, experts have said, lies with North Korea using less rice and corn to make its beverages compared to South Korean manufacturers.
Such quality products have even spurred visits by foreigners who want to taste the beer.
The paper, meanwhile, did not give exact details on the size of the new brewery other than to say it covered several thousand square meters.
Read the full story here:
N. Korea sets up modern brewery in Haeju
On April 22, for the first time since Premier Pak Pong Ju took office as the new Premier of the DPRK Cabinet, North Korea held an extended cabinet plenary meeting. Cabinet members discussed a variety of topics including the economy, enhancing nuclear capability for military purposes, advancing the party line, the results of the National Light Industry Convention, the first quarter assessment of the People’s Economic Development Plan, and adjustments to be made to the People’s Economic Development Plan during the second quarter.
The meeting has spurred interest in what economic breakthroughs will be made under Premier Pak’s direction. While this was only the first extended meeting held since Premier Pak became premier, there appeared to be no fundamental changes in the party line. The results from the last Politburo extended meeting regarding the National Light Industry Convention and the advancement of the party line in the areas of economics and the nuclear program were mirrored in the cabinet meeting. At the meeting, cabinet members emphasized groundbreaking measures that would contribute to improving the lives of the North Korean people.
At the Light Industry Convention, Kim Jong Un ordered for the normalization of operations of factories that produce consumer goods. As Pak was the official in charge, it is likely that he demanded for specific plans to stabilize production.
At the extended cabinet meeting, measures in response to the international sanctions against the country were also discussed. The KCNA reported the results of the meeting: “Foreign economic business must be strengthened to destroy the blockade of the US imperialists and their followers and put forth tasks and measures to explore favorable conditions to become an economic powerhouse.”
In order to avoid the sanctions of the international community, North Korea must continue foreign trade with China and other countries, as covertly as possible.
With respect to the contents of the meeting, Minju Choson, the state-run North Korean government newspaper, reported that “specific plans were discussed to expand the fuel production and restart Yongbyon GMR (graphite moderated reactor), and educational programs for nuclear experts.” In addition, plans for the development of practical and communications satellite were established and reaffirmed in order to continue the launch of long-range ballistic missiles.
North Korea’s long-range missiles, restart of the Yongbyon nuclear facility, and uranium exploration are under the control of the Second Economic Commission, military defense (military economy affairs), not the Cabinet. The Second Economic Committeeis the central coordinating body of the DPRK’s military-defense industry. Yet, the cabinet declared its decision to continue nuclear and missile launches at the cabinet meeting. This would suggest that the cabinet is supportive of Kim Jong Un’s “byungjin line,” or policy of pushing forwarding economic construction and the building of a nuclear force.
Expectations that cabinet reform would be mentioned did not come to fruition. There is a probability that Premier Pak is preparing to implement in earnest the ‘6-28 Economic Management Improvement Policy’ which has been in the works internally since last year.
North Korean leader Kim Jong Un, since delivering the New Year’s Address last January, has promoted Premier Pak as the leader most qualified to execute plans to make North Korea an economic power. However, it is unclear whether Premier Pak will be able to meet such a challenge given the limited reforms in progress and the deterioration of the external situation. On the other hand, Premier Pak chose a cooperative farm for his first site visit which suggests that the North Korean cabinet may concentrate on agricultural sector this year.
According to KCNA (2013-4-10):
A production upsurge was witnessed in various fields of the economy in the Democratic People’s Republic of Korea during the first three months this year.
The quarterly coal output quota was hit at 101 percent nationwide. Coal production increased sharply at the Kaechon, Tokchon and Kangdong area coal-mining complexes.
The Kim Chaek Iron and Steel Complex, a giant steel maker, finished the quarterly pig production plan at 105 percent.
The Taean Heavy Machine Complex, a major generator producer, topped the plan for March by 30 percent.
The same is true for other machinery makers, including Rakwon and Ryongsong Machine complexes.
A production upswing was also seen in the timber industry, with its quarterly plan topped at 100.5 percent.
In particular, forestry stations under the Jagang Provincial Forestry Management Bureau made fresh innovations in logging.
Institute for Far Eastern Studies (IFES)
On March 18, Kim Jong-un opened North Korea’s first national light industry convention in ten years, calling for efforts to be focused on the development of light industry. The hosting of this national meeting of light industry workers is somewhat atypical behavior for the leadership, as this event was held amidst military exercises aimed at demonstrating North Korea’s combat readiness.
In his speech, Kim Jong-un pointed out a number of issues which are currently affecting North Korea’s light industry sector including supply shortages, low quality, a high level of dependence on overseas suppliers of raw and other materials, workers’ ‘defeatism’, and a preference for imported goods.
He also emphasized the need for economic improvement through the development of light industry, promoting the production of consumer goods for the public, and modernization of the light industry sector on a scientific basis. In touching on these areas, Kim reiterated points made in his New Year’s address earlier this year.
Kim Jong-un’s itemization of the issues negatively impacting the light industry sector is receiving particular attention. During the Kim Il-sung and Kim Jong-il eras, progress reports tended to exaggerate positive results, with positive assessments of current performance and rosy projects for the future. Comparatively, Kim Jong-un’s unfiltered account of the state of the light industry sector in North Korea seems somewhat unconventional when juxtaposed against the propaganda of past regimes.
In Kim Jong-un’s words, “in the struggle to enhance livelihoods and to build an economically powerful country, the light industry and agriculture sectors must adopt the course of combining their fire power to deliver a decisive strike.” He further said, “Despite the current precarious situation, light industry, as this year’s first priority for economic development, will quickly solve the issues affecting livelihoods. Through the light industry, we will demonstrate the superiority of the socialist system and our ability to maintain livelihoods. This will be done in the name of advancing the great revolutionary event of national unification.”
Kim Jong-un indicated that the greatest issues facing North Korean light industry today are supply shortages and low quality. “Currently at light industrial factories, we are unable to accomplish the teachings left by Kim Jung-il. Whether exhibiting a new product or sample or displaying products in a store we must mass produce items and return them to the people.”
He continued, “The culture- and lifestyle-related demands of our people are rising by the day. No matter how many consumer goods are produced, if they are not of a quality high enough to meet the demands of the people using them, they are useless. We must produce consumer goods favored by the people and that receive good reviews. We must produce goods impeccable in the global marketplace.”
Kim Jong-un also pointed out that “high dependence on imports of raw materials and construction materials was another serious problem currently facing the light industry sector.” He said that “in order to realize domestic production of raw and other materials, the chemical industry must play a major role.” Kim claimed that “an economic business network must be established among factories and enterprises in the chemical industry” and that “a variety of chemical products composed of high quality textiles and plastics must be produced.”
“Currently, the most significant problem is that our workers do not feel responsible for the failures of their work sector and work units. Instead they have succumbed to defeatism and no longer put forth their greatest effort.” Kim added that “a preference for imports among workers stands as an obstacle to development of light industry.” He went on to say that “we must do away with the tendency to buy from other countries which have different facilities and the tendency to bring in foreign currency while claiming that we must import because our factories are modernizing.”
Since the 2003 ‘National Light Industry Sector Workers’ Conference’ which ran from March 23-24, North Korea has not held a national meeting of local light industry workers.
According to Yonhap:
North Korean leader Kim Jong-un called for concentrated efforts to build up the country’s light industrial sector that has direct bearing on the lives of everyday people, state media reported Tuesday.
The (North) Korean Central News Agency (KCNA) monitored in Seoul said Kim stressed the importance of the sector in a speech given at the national meeting of light industrial workers held on Monday in Pyongyang.
“Kim Jong-un in his speech said that the light industrial front along with the agricultural front are the main fronts on which efforts should be focused in the drive for building an economic power and improving the people’s living standards,” the official news wire service reported.
It also said that Kim pointed out that light industry is the main target for the concentration of the country’s resources, even under heightened tensions surrounding the Korean Peninsula, the media report said.
The KCNA said Kim emphasized the goal of the country is to prevent a new war from breaking out on the Korean Peninsula and to strive for economic growth under peaceful circumstances to highlight the superiority of Pyongyang’s socialist system and hasten eventual unification of the two Koreas.
The news report said the leader pointed out that there is a pressing need to locally produce materials and parts for the light industrial sector and ordered the development of the chemical sector and build-up of regional manufacturing capabilities.
“It is necessary to make the most effective use of existing production potential to radically increase the production of consumer goods and push forward with the modernization of light industry, and make it the world’s standard,” the leader told people gathered at the meeting.
Kim, moreover, called for creating up-to-date managerial and corporate strategies, and doing away with the inflexible attitudes of workers and managers in the light industry field.
North Korea watchers in Seoul said the North Korean leader’s latest remarks on light industry mirrors what he said in the New Year’s address on Jan. 1. The light industry gathering is the first to be held in 10 years. The last time such a gathering was held was in late March 2003.
Chang Yong-seok, senior researcher at the Institute for Peace and Unification Studies at Seoul National University, said the emphasis on light industry at a time when Pyongyang has placed the country in battle mode is a sign that the North does not want to ignore the economy or its impact on the people.
Others such as Yang Moo-jin, political science professor at the University of North Korean Studies, claimed that the KCNA report and the sudden holding of the meeting may be a sign that Pyongyang wants to end the current confrontational stance with the outside world and focus on its economy.
“This may be an indirect message (of reconciliation) sent to South Korea, the United States and China,” the expert said.
Reflecting this view, an official at the unification ministry, who declined to be identified, said Kim’s interest in light industry may be due to the lack of progress made so far, and the need to invite foreign capital to get various commercial projects moving.
“The North can’t do this by itself so it may be seeking outside cooperation,” he said.
The Daily NK also reports that light industrial production has been hampered by recent military mobilizations:
The mobilization of factory workers for military training exercises is having a considerable effect on economic activity in North Korea, Daily NK has learned. In particular, much light industrial production capacity has already been idle for around a month.
A source from Chongjin in North Hamkyung Province told Daily NK on the 18th, “The only factory work teams that are operational right now are those making stuff for the military; almost everyone else has been mobilized for the military exercises. Since other teams are not producing anything, workers in them are not being given food, not even for just a few meals each, and this is making life even harder for them and their families.”
In North Korea, most factories and enterprises are so-called ‘self-sustaining’ entities, in practice meaning that they are sustained through the selling of goods to wholesalers or directly in the ’jangmadang’ (state-sanctioned market). Income from sales is used to finance the purchase of additional production inputs. There are some differences across regions and types of enterprise, but on average enterprises are permitted to allocate around 30% of production to this purpose.
The source went on, “For example, all the staff in Chongjin Shoe Factory have been mobilized apart from the ones doing military footwear, and the workers in that section are also having a hard time because they have not been mobilized precisely in order to make excessive amounts of that product,” before explaining, “Normally that work team would produce its quota of military footwear and then turn to civilian production and sustain itself by selling the output, but for the last month all they’ve been doing is making military goods.”
In North Korea, it is not only ‘military factories’ that produce military goods; rather, every factory has a work team dedicated to the production of one military item or another. According to the source, for a month there has been no production on other lines, while only the military lines are operational.
“In the case of Chongjin Wood Processing Factory, they’ve been producing nothing but ammunition boxes for a month, where they were previously accustomed to producing chairs, wardrobes, and cupboards for storing bedding,” the source said. “The workers had been living reasonably well, but right now they are complaining about how tough it is.”
In the case of Kimchaek Iron and Steel Complex, one of the largest industrial entities in the region, among many tens of work teams only the personnel required for weapons production are still working; the remaining thousands of workers have been mobilized for military training.
The source noted, “Workers in any and all enterprises are used to receiving a share of production with which to maintain themselves and their families, but right now, with having to spend days in the mountains or down in underground tunnels, their hardships are being significantly exacerbated.” There is a trickle down effect in the wider economy, he added, saying, “The problems extend down to traders, who are accustomed to getting the factory distribution to sell.”
Read the full article here:
N. Korean leader calls for concentrated efforts to build up light industry
A reader sends in the marketing material for a new toothpaste on offer in the DPRK:
According to the label this toothpaste is quite innovative:
“Super herb-made toothpaste”
“In a minuite you feel its efficacy as at medicine.”
“It removes saburra, disease germ, tartar (?) and bad smell”
“96.5% effective at removing bad breath”
“Not only riggs´ disease but also traumatic treatment”
Feeling traumatized? Reach for this toothpaste!
If anyone can determine the active ingredient or name of the manufacturing company/factory on the label, please let me know.
A couple of weeks ago, the South Korean Central Bank, the Bank of Korea, published its estimate of the size and composition of the North Korean economy in 2011. You can read the finings (PDF) here. I have posted this and many other estimates of the North Korean economy on my “DPRK economic statistics page“.
Here is coverage of the report in Bloomberg/Business Week:
Gross domestic product in the communist nation increased 0.8 percent in 2011 after a 0.5 percent decline in 2010, according to an estimate published by the Bank of Korea in Seoul. The nation’s economy has contracted during four of the last six years, the bank’s data show.
“The manufacturing sector declined, but the agricultural industry enjoyed better weather and more use of fertilizer,” the Bank of Korea said in an e-mailed statement.
North Korea is projected to keep growing under the new leader as its economic ties with China and Russia develop.
“Mineral exports to China and dollars brought in by North Korean workers sent to China and Russia would have driven the country’s GDP growth,” said Koh Yu Hwan, a professor of North Korean studies at Dongguk University in Seoul. “North Korea is expected to be economically stronger under Kim Jong Un as it continues to increase transactions with its allies.”
Kim Jong Un has waged a nationwide campaign to “bring about a turn in agriculture” and increase crop yields, according to a June 7 report carried by the official Korean Central News Agency. North Korea’s agriculture and fisheries sector expanded 5.3 percent in 2011 while manufacturing fell 3 percent, according to the BOK report.
North Korea’s nominal GDP totaled 32 trillion won ($28 billion) in 2011, compared with South Korea’s 1,237 trillion won, the BOK said. North Korea’s per capita income was 1.33 million won while South Korea’s was 25 million won, according to its estimates.
After adjusting for inflation, North Korea’s economy remained smaller at the end of 2011 than it had been in 2008, according to the Bank of Korea.
Here is more from Strategy Page:
The North Korean economy is undergoing changes. In fact, last year there was actually some growth, with GDP increasing .8 percent, versus a .5 percent decline in 2010. The North Korea GDP (about $28 billion, compared to $1,100 billion for South Korea). Thus even with a larger population, the average South Korean has 20 times more income as their northern counterparts. Moreover, income distribution is quite different in the north, where about two-thirds of the population is very poor and very hungry. The other third contains the well-fed ruling elite (whose lavish country estates can be seen via commercial satellite photos) and their supporters (secret police, military officers, bureaucrats) plus the semi-legal merchant class that has been allowed to develop over the last six years to avoid total economic collapse.
The economic decline in 2010, was the result of agricultural (floods) and industrial (massive power shortages) failure. But China came to the rescue by offering to set up mining operations in North Korea and buy billions of dollars-worth of minerals each year. China rebuilt railroads to handle the increased traffic from the remote North Korean mines. In addition, China offered legal jobs for North Koreans in China. The only catch was that the North Korean government took most of the pay. Similar deals have long been used with Russia but China offered far more jobs under more comfortable conditions. Competition for these jobs is fierce in North Korea and the government selects those deemed least likely to run away.
Last year North Korea bought more fertilizer for farmers and the weather was pretty good. That, plus the growing income from Chinese run mines and North Korean workers in China made up for the continuing declines in manufacturing. A good year on the farm is a big deal in North Korea, where farming and fishing are 23 percent of the economy (compared to under three percent in the south). But this year all of Korea is suffering from a record-breaking drought. This is hurting the north a lot more than the south. Although the monsoon (jangma) rains recenly arrived, a month late, the damage was already done in the north. Three months of very hot and very dry weather has seriously damaged crops. The rains will save some of them but at least a fifth of this year’s crops will be lost.
The Hankyoreh has published an interesting about a inter-Korean economic project in Dandong, China.
According to the article:
Taking its name from the traditional song “Arirang,” Ari Sports was established in Nov. 2011 with a 500 million won investment from the city of Incheon and 23 workers from North Korea. It is managed not by a North or South Korean organization, but by China’s Yunnan Xiguang Trade.
The football sneaker and sports clothing production plant was originally planned for Pyongyang’s Sadong District. Efforts began in 2008, and the building was nearly complete when the May 24 measures were passed in 2010 and it had to be abandoned. The factory in Dandong is a temporary structure erected in its stead.
Inter-Korean Athletic Exchange Association standing committee chair Kim Gyeong-seong said, “It’s frustrating not to be able to use the good land and facilities we had in Pyongyang.”
“I hope we are soon able to produce and sell soccer shoes and clothes in Pyongyang,” Kim added.
Song said, “Things are difficult right now between North and South Korea, but if we all work together we can overcome it.”
He added that the company was a “small but meaningful project taking place at a time when economic cooperation has been shut off.”
The company has received orders for three thousand pairs of soccer shoes as of May. It currently plans to produce and sell two to three thousand pairs a month. To achieve this, it is organizing a football contest for working people nationwide at the first Incheon Peace Cup event to commemorate the June 15 Summit on June 16 and 17.
I have never heard of this project and I have been unable locate any other articles on the factory. Despite its relative obscurity, however, the North Korean workers know how to deal with the foreign press (they stay on message):
On June 9, the company was visited by around fifty participants in the Incheon-Dandong-Hankyoreh West Sea Cooperation Forum, including Incheon Mayor Song Young-gil and Hankyoreh Foundation for Reunification and Culture chairperson and former Unification Minister Im Dong-won. Located in a farming village on the outskirts of Dandong in China’s Liaoning Province, Ari Sports has 1,600 square meters of floor space on a plot of land also measuring 1,600 square meters.
North Korean workers expressed their frustration with the inability of economic cooperation projects to move forward due to the state of inter-Korean relations. Workers Kwon Ok-kyong, Kim Kum-ju, and Kim Myong-hwa said they wished production and sales could proceed smoothly.
When asked about working at the company, Cho Sang-yon said, “Well, it’s not as good as working in my home country.”
Pak Hyok-nam said, “I’d like to see bigger economic cooperation projects between North and South.”
I have been unable to learn anything else at all about this project. If you are able to find company logos, web page, photos, or even factory locations on Google Earth, please let me know.
Read the full story here:
Factory in China continues producing soccer shoes in spite of frosty relations