(h/t DPRK Studies) Erik van Ingen Schenau of the China Motor Vehicle Documentation Centre has posted a collection of photos of vehicles manufactured in North Korea. Check them all out here.
Other links:
1. Background on Sungri Motors here. This is the location of the Sungri Motor Plant.
2. Some background on Pyonghwa Motors here. This is the location of the Pyonghwa Motors plant.
3. I am not sure of the location of Pyongyang Auto Works or the Kamaz (Russian company) factory in Pyongsong.
According to Yonhap:
North Korea has taken steps to attract more overseas investors by scrapping extra land use fees and introducing selective import rules that can help foreign-owned companies maintain a market share, a Chinese newspaper said Friday.
According to the Jilin Newspaper, the official daily of China’s Jilin Province, a North Korean official promoted the new foreign-investor friendly measures during a recent trade exposition held in the city of Changchun.
“We revised pertinent laws and regulations so as to relegate land use fees, which have been paid annually by foreign-invested companies to their (North) Korean partners that loan the land,” Yun Yong-sok, a senior official at the international investment department of the North’s Ministry of Foreign Trade, was quoted by the paper as saying at the expo. North Korea’s Radio Pyongyang reported a delegation’s trip to the Chinese expo on Aug. 26.
Foreign investors have so far paid annual land use fees to the North Korean government in addition to a one-off lease payment, which will be still levied after the revisions.
The measures come as North Korea faces tightening international sanctions over its May nuclear test. The U.N. sanctions ban North Korea’s arms trade, a major source of income for the impoverished country, and closely scrutinize cash flows to the North.
North Korea also introduced “state support measures,” such as banning imports of goods that are already produced in adequate quantities within the North by foreign companies to ensure investors’ profits, Yun was quoted as saying.
Foreign companies that invest in science and technology in the North will get additional tax incentives, but those who take North Korean minerals, timber or fish abroad will be levied a new “resource tax” to protect the country’s natural resources, Yun added.
Read the full story here:
N. Korea boosts incentives for foreign investors
Yonhap
9/4/2009
GPI Consultancy
PDF marketing brochure here
One of the results of the recent visit of former US President Bill Clinton to Pyongyang is a renewed interest to explore business opportunities with North-Korea. The current improvements in the relations between North- and South-Korea will fuel this growing interest as well.
North-Korea is now opening its doors to foreign enterprises. It is competing with other Asian countries by offering skilled labour for low wages. It established free trade zones and several sectors, such as renewable energy, shipbuilding, agro business, textile, tourism, logistics and mining, can be considered for trade and investment. In addition, the country is attractive in the field of Information Technology (see photo).
Do you want to be informed about these interesting business opportunities? Then join our unique afternoon seminar on Monday 21 September 2009 in Beijing. Three speakers from Europe will address various aspects of doing business in North-Korea, and they will also share their own experiences. The program of this informative seminar is as follows:
15:30-16:00 hours Registration and welcome of attendees
16:00-16:30 hours General introduction: the latest developments in doing business with North-Korea
16:30-17:00 hours North-Korea: an upcoming IT-outsourcing destination
17:00-17:30 hours Experiences of some large European companies, such as ING and Unilever, in North-Korea
17:30-17:45 hours Questions and answers
17:45-18:15 hours Informal meeting
Several short videos (e.g. on software development and the Kaesong Industrial Zone) will also be shown. Details of the program, including the location, can be found in the attached file. Please feel free to forward this mail to other interested persons.
With best regards, Paul Tjia (director)
GPI Consultancy, P.O. Box 26151, 3002 ED Rotterdam, The Netherlands
E-mail: [email protected] tel: +31-10-4254172 fax: +31-10-4254317 Website: www.gpic.nl
Institute for Far Eastern Studies (IFES)
NK Brief No. 09-9-4-1
9/4/2009
The latest issue of the Kim Il Sung University newspaper (2009, no. 2, April) acknowledged the international society’s sanctions against North Korea, and in a bid to encourage a self-determinant resolution to the country’s economic problems, the paper called for “the utmost circulation of dormant cash,” emphasizing the role of the bank.
The paper stressed that strengthening the role of the bank was a crucial part of ensuring the country’s socialist system continued to operate. It also stated that elevating the position of the bank and circulating currency were essential elements of ensuring that North Koreans were not reliant on foreign assistance, and that they were able to solve their problems independently.
In the article encouraging currency circulation, it was stated that “the oppressive isolation policy of the imperialists grows worse every day,” but that by maximizing capital circulation, domestic economic problems could be resolved and the North could complete its bid to create an economically strong nation even more quickly.
The article reflects the DPRK government’s attempt to encourage spending of Won, Dollars, and Euros by institutions, enterprises and even individuals in an attempt to ease economic woes even in the face of international sanctions. Jung Yeon-ho, a researcher with the Korea Development Institute (KDI), reported in 2003 that North Koreans were sitting on as much as 600,000-1,000,000 USD. Since 2003, North Korean authorities have been trading US dollars for Euros due to sanctions from Washington, so now many in the North also have considerable amounts of Euros stashed away, as well.
Kim Il Sung University, through its paper, insisted that banks needed to strengthen their role in currency circulation and lending, and to ensure that their services were in line with the demands of the times. It noted that banks were taking note of the needs of individuals and enterprises, and catering to their demands in order to more appropriately respond to their issues and not only meet their needs, but to encourage their continued use.
Some North Koreans have had bad experiences with banks, not being able to withdraw previously deposited funds or not earning expected interest. This has led some to avoid banks in order to guarantee their savings.
After the North’s July 1st (2002) Economic Management Reform Measure, an attempt to make policy reflect reality in the North, the government began selling 10-year ‘People’s Lifestyle Bonds’. In early 2006, North Korea’s banks began offering savings accounts, loans, and other services to individuals and enterprises in order to encourage spending.
German Asia-Pacific Business Association
Ausgabe 3/2009
Download the full publication here (PDF)
Download Mr. Abt’s article here (PDF)
North Korea – doing business in a demanding environment
Despite political obstacles within the system and internationally, it is possible to set up successful business in North Korea, says Felix Abt. Identifying partners and exploring market potentials are difficult tasks. Having completed them, one can count on a dedicated workforce.
The Right Local Partner: The Most Important Requirement to Succeed First, you need a Korean partner for your business as you cannot do any business without one and, second, you do have to find the right one if you want to succeed. When you start with your fact finding mission you come across people who want to introduce you to a specific business partner or they want you to do business with themselves. Of course, they have a vested interest and, most likely, they will not introduce you to alternative and potentially more suitable business partners. But you need to know that in every industry there are companies of different sizes, competence, ranges of products, competitiveness etc.
UPDATE 9/2/2009: According to the Koryo Tours newsletter, the mass games will be extended to the 10th October–so an extra 2 weeks for Americans to visit DPRK this year. Also, a quick mass games tour for 850 Euros will be repeated Sept. 24-26. Finally, Koryo Tours is resuming a tour of Turkmenistan this November. I took this trip and recommend it. Learn more about travel to Turkmenistan here.
ORIGINAL POST: Koryo Tours sent out a newsletter highlighting an affordable trip to see the Mass Games in Pyongyang this year:
Following on from the success of our first ever mini-break, we are pleased to be able to offer you a re-run of the most affordable trip we have ever run to North Korea. This is an amazing opportunity to experience the Arirang Mass Games as well as the highlights of the capital city of Pyongyang, see what all the fuss is about this August on a journey we guarantee you will never forget. Koryo Tours has been running trips to North Korea for over 16 years now and is the only expert in the field.
-only 850 Euros all inclusive from Beijing
-3 days in North Korea
-package includes return flights from Beijing, deluxe accommodation, transportation in North Korea, entry fees, guides services, etc
-2 opportunities to see the Arirang Mass Games, literally the most amazing spectacle you will ever witness
-full itinerary in Pyongyang city, including the Juche Tower, Korean War Museum, Kim Il Sung Square, Pyongyang Metro, and much more
-meals in local restaurants
-US citizens welcome to join this tour also
-accompanied by our expert British staff and the best Korean guides available
-the maximum experience for the minimum cost
-discounts available for students, children, and groups of 3+ booking togetherThis tour will take place from September 24th – 26th and the deadline for booking is Monday September 14th, please get in contact if you are interested in being part of this journey of a lifetime to the country that makes the most news but still has only a trickle of western visitors per year. See it for yourself a mere 90 minutes from Beijing by plane. A fascinating, safe and unique experience is guaranteed.
Check out Koryo Tours’ web page here.
GPI Consultancy
Sept 19-26, 2009
1820 Euros
“In the current financial and economic situation, companies face many challenges. They must cut costs, develop new products and find new markets. In these fields, North-Korea might be an interesting option. Inspired by the economic successes of its neighbouring country China , North-Korea has since a few years opened its doors to foreign enterprises. It established several free trade zones to attract foreign investors and there are several sectors, including textile industry, shipbuilding, agro business, logistics, renewable energy, mining and Information Technology, that can be considered for trade and investment.
North-Korea is competing with other Asian countries by offering skilled labor for very low monthly wages and by offering tax incentives. Last year, North-Korea’s exports rose with 23 percent and its imports with 32 percent. Do you want to explore new business opportunities for your company? Then join us from 19 – 26 September 2009 on our trade & investment mission to North-Korea. The program includes individual matchmaking, company visits, network receptions and dinners. Furthermore, we will visit the annual Autumn International Trade Fair in Pyongyang. We will also meet European business people who are working and living in North-Korea.
The mission is meant for entrepreneurs from various business sectors; tailormade meetings will be arranged by our local partner, the DPRK Chamber of Commerce. The program of this unique mission has been attached and we can be contacted for further details. In case you want to participate: please register as soon as possible, so we can start the visa-application procedure.”
Some examples of investment opportunities in North-Korea:
1. http://www.gpic.nl/invest(hungsong).pdf
2. http://www.gpic.nl/invest(clock).pdf
GPI contact information:
Paul Tjia, Senior Consultant
GPI Consultancy, .O. Box 26151, 3002 ED Rotterdam, The Netherlands
E-mail: [email protected] tel: +31-10-4254172 fax: +31-10-4254317 Website: www.gpic.nl
UPDATE: According to Business Monitor International:
koryolink, North Korea’s sole mobile service provider has reported strong subscriber demand. The joint venture (JV), which is 75% controlled by Orascom Telecom of Egypt and the remainder held by state-owned Korea Post and Telecommunications Corporation (KPTC), saw its subscriber base rise by 149.2% quarter-on-quarter (q-o-q) in Q209 to end with 47,863. The operator stated it had encouraged interest in its services through further cuts in connection fees, the introduction of free SMS for the first time and the revision of free minutes to satisfy customer requirements.
Almost all of the operator’s subscribers are based in the capital Pyongyang. This is due to the prevalence of two retail outlets based in the downtown area, in addition to three KPTC shops, which sell koryolink services, while the level of network coverage is significantly higher in the capital than anywhere else in the country. Although calls can be made outside of Pyongyang, the reception is often poor, suffering from weak service quality and dropped calls.
Mobile penetration rates, based on Pyongyang’s population are estimated at 1.4%, which is significantly lower than the 30% cited by cellular-news sources. Demand for mobile in the capital has been led not by government officials and foreign ownership but by ordinary citizens. State employees and foreigners are prohibited from owning mobile handsets, which has been deemed a security risk, with authorities wishing to control information from being circulated outside. This was a primary reason for the decision to ban mobile services in the country following the explosion in the northern Ryongchon train station in April 2004, which was said to have been a failed assassination attempt on North Korean leader Kim Jong-il, who had passed through the station several hours before the explosion. A state of emergency was subsequently declared, and the country cut all telephone and mobile lines in order to stop news from getting out
While the two most likely market segment groups able to afford and own mobile handsets have been barred from usage, this has not impacted mobile revenues. Indeed, koryolink announced that its Q209 revenues had risen by 179.7% q-o-q to US$12.472mn, based on strong subscriber growth and ARPUs of US$22.8.
Meanwhile, there are plans to create a national mobile network across the country, according to the North Korean Central Broadcasting Station, as cited by state news agency Yonhap News. Fibre-optic cables are also being laid to link the capital with all provinces with the intention of supplying digital services. The automation and digital capacity of the country’s data networks are said to have already risen by some sevenfold over the last 16 years.
ORIGINAL POST: Download Orascom’s financial report for the first half of 2009 (here in PDF). The information on Koryolink is on page 24. Here is the text:
Being the first full fledged operator to serve DPRK offering attractively priced services and utilizing state of the art technologies, Koryolink was met with very positive market reception. The first of its kind mobile fair in the history of DPRK was launched during the last two weeks of March.
In order to capitalize on the subscriber growth momentum, in the second quarter of 2009 Koryolink introduced further reduction in connection fees as well as free SMS for the first time. Additionally, the mix of free minutes was revised to satisfy customer requirements. Such changes resulted in even more positive demand.
Throughout the second quarter, demand on Koryolink services remained strong and the subscriber base at the end of Q2 ended just short of 50K representing an increase of 149% in subscriber base compared to Q1. Koryolink subscriber base stood at 47.85 thousand by the end of Q2.
Koryolink retail network currently consists of 2 large sales shops strategically located in downtown Pyongyang with 3 additional scratch card sales outlets located within KPTC post office shops. Koryolink plans to expand the indirect sales network through the inauguration of 6 more outlets within KPTC shops. A separate after sales service shop is planned for Q3.
According to the report, at the end of the second quarter of 2009 Orascom reported that Koryolink’s mobile subscriber base reached 47,863 (this was apparently leaked earlier in the year so no surprises there), up from 19,208 three months earlier. During Q2 MOU rose to 199 per month, but ARPU fell to USD22.8, compared to USD24.7 in the first quarter of 2009.
And according to Yonhap:
Orascom reported that its operating profit from North Korea reached US$2.49 million in the April-June period, soaring about eight fold from $312,000 for the previous quarter.
Second quarter sales for Koryolink, a 75-25 percent joint venture between Orascom and North Korea, amounted to $8.01 million, with its profit margin reaching 31 percent, up substantially from the 7 percent for the previous three months, according to Orascom.
Read more Koryolink stories here.
UPDATE 2: The Nosotek staff have produced a short video of the staff at work on their computers. You can see it on YouTube here.
UPDATE 1: Here is a list of Nosotek’s services and prices. Click here to read in PDF.
ORIGINAL POST: Nosotek is the first western IT joint-venture company in the DPRK. According to their web page:
In DPRK, software engineers are selected from the mathematics elite and learn programming from the ground-up, such as assembler to C+, but also Linux kernel and Visual Basic macros.
Among them, Nosotek has attracted the cream of local talent as the only company in Pyongyang offering western working conditions and Internet access.
In addition to the accessible skill level Nosotek was set-up in DPRK because IP secrecy and minimum employee churn rate are structurally guaranteed.
Nosotek sells direct access to its 50+ programmers jointly managed by western and local managers.
Services can be invoiced through a Hong Kong or Chinese company.
Benefit from North Korea’s opening, outsource to Nosotek
Our special application development service offerings include:
1. Tailor-made eBusiness solutions
2. Integrated Content Management solutions
3. Application Development
4. Research & Development
5. Special Component Based Software Development
6. Videogame Development
Interestingly, Nosotek has a YouTube channel where you can see demos of the videogames being produced in the DPRK for mobile phones. Check out their video demos here.
Here are some intereviews with the company’s directors: Volker Eloesser, Ju Jong Chol
The BBC ran an interesting video story on North Korean loggers felling trees in Russia. Of course this has been going on for a long time. However, this is the first video footage of the logging facilities that has appeared in the Western media.
According to the video, North Korea’s logging concessions are managed by a company called “Association No. 2,” which is housed in a compound in northern Tynda, Russia. According to the story, Association No. 2 receives 35% of proceeds of logging (appx $7m) some fraction of which is repatriated to the DPRK’s Ministry of Forestry. Using the video, I located the Association No. 2 compound on Google Earth. Here is an image:
(Click on image for larger version. You can see it in Google Maps here.)
Additional Notes:
1. I have not been able to locate the other North Korean logging camps in Russia. If any readers can find them, please let me know.
2. The DPRK appointed a new Minister of Forests last October.
3. Bertil Lintner on North Koreans working in Russia.
4. Andrei Lankov on the loggers.
5. Claudia Rosette on the loggers.
6. YouTube video on NKs in Russia.
