2:19 pm - Saturday November 1, 2014

Two South Korean firms in Kaesong to close operations

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Two South Korean firms in Kaesong to close operations
Two South Korean firms in Kaesong to close operations
Seoul – Two South Korean companies in the Kaesong industrial complex have decided to close operations due to the unfavourable business conditions, sources said Tuesday.

A textile manufacturer and an electronic parts producer have signed contracts to sell their factories and land in the industrial complex, Xinhua cited Yonhap news agency that quoted the unification ministry and corporate insiders.

They added that another small company that makes stuffed goods at a factory apartment run by the Korea Industrial Complex is also planning to abandon its Kaesong operations considering the increasing financial difficulties.

“Concerns caused by a cooling off of cross-border relations after the Kaesong complex reopened are making it hard to secure orders, and there are growing fears that things will not improve in the near future,” Yonhap quoted a corporate source as saying, who declined to be identified.

He said there are other companies who may decide to leave Kaesong if things don’t improve soon.

Entrepreneurs said companies in Kaesong are currently operating at just 50 percent capacity since the park resumed operation Sep 16.

Three out of the 123 companies in the complex have not restarted their factories.

Many companies are not satisfied with the chaotic management in terms of travel, communications, customs and protection of South Korean workers.

The unification ministry said it has been informed of these unfavourable conditions and some companies’ decisions of withdrawing from Kaesong. But it said no formal paperwork for the transfer of assets or closure has been received yet by the Kaesong Industrial District Management Committee.

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