hankyoreh

With a Hyundai Asan worker detained and inter-Korean relations soured, concerns are growing for the fate of the Kaesong (Gaeseong) industrial complex located in North Korea’s border town. A German buyer’s recent decision to expand business ties with a shoe manufacturer in the complex is giving hope that the joint business project between South Korea and North Korea will continue.

Under a memorandum of understanding signed on Thursday, Samduk Tongsang Co. said that it will increase supply to Me & Friends, a large-sized German shoe retailer that has 1500 shops in 29 countries across the globe. The South Korean company said the MOU was signed after Michael Alexander, head of Me & Friends, visited the factories of Samduk in Kaesong. “Mr. Alexander saw how North Korean laborers continue to work without problems and was satisfied with the products we produce,” a Samduk official said. Samduk exported 8 million dollars worth of products to Me & Friends last year under the original equipment manufacture (OEM) method, and expects the overseas shipments to exceed 10 million dollars this year.

Mun Chang-sub, president of Samduk Tongsang Co. and representative of an association of South Korean firms in Kaesong, said that the deal with Me & Friends gives a glimmer of hope for the joint industrial complex. “Buyers at home and abroad recently felt irritated due to rising tensions over the Kaesong industrial complex project,” he said. “The signed MOU will help ease such jitters and bring back hope.” He added, “Some say that the Kaesong complex is in a crisis, but local workers do not feel it…The German buyer seemed to have confidence that it could increase orders after witnessing that workers from South Korea and North Korea are cooperating together to sustain the development of Kaesong.”

Samduk’s factories in Kaesong were launched in 2004 and Samduk employs 2,800 North Korean workers in producing materials and parts for functional shoe products. Since the workers have since acquired more refined skills and experience, Samduk has plans to produce end products starting this year.

Samduk is not the only company that says business in Kaesong is still attractive despite being confronted with many downside risks. Yoo Dong-wook, chairman of Daewha Fuel Pump, said, “We are close to a deal with a foreign company for product supply.” The chairman also said, “Despite tough conditions facing us like difficulty in border passage, a low language barrier and cheap labor costs are still merits that give the complex a competitive edge.”

Please direct questions or comments to [englishhani@hani.co.kr]