hankyoreh

Gyeonggi Province on Sept. 25. (by Ryu Woo-jong

By Park Byong-su, staff reporter

October 16 marks one full month since operations resumed at the Kaesong Industrial Complex. Things may have started off with a sense of new hope on Sept. 16, but a month later businesses are facing anxiety and uncertainty.

For the most part, tenant companies have scrubbed their equipment free of the rust that accumulated over six months of idling. The machines are back and running at full force. Some 40,000 North Korean workers have returned to their jobs and are busy with their duties.

Even after such a long “vacation,” the adaptation has been relatively swift.

“Seeing [the North Korean workers] again was like seeing family members you haven’t met in ages,” said Choi Dong-jin, president of the sewing company DMF. “Everyone hugged and bucked each other up, promising we’d never get separated like that again. We’re all fully committed to doing a good job.”

Another businessman said the workers’ faces showed signs of how difficult the months of idleness had been.

“Their faces were so dark I couldn’t recognize them. I felt bad for them,” the businessman recalled. “Some of them had been drafted to do labor, while others had just sat around doing nothing. They seem to have a light of hope in their eyes now that the factory is back up and running.”

But the complex as a whole is still a long way from getting back to normal. At the moment, it is running at just over 80% capacity, manned by only 43,000 North Korean workers. It is a much quieter place than it was on April 9, when there were 53,000 of them.

South Korean staff numbers are also down. Before, there were 800 workers and 400 vehicles - now the numbers are 600 and 300, respectively.

“The reason there are 10,000 fewer North Korean workers is because factory operation still isn’t completely back to normal, and they don’t have enough work for everyone,” explained a senior Ministry of Unification official. “I’ve also heard that some of the workers moved to different workplaces and communities while the factory was closed down.”

Indeed, the factories are operating well short of capacity.

The South Korean government estimates the operation rate at around 80%.

“We can’t speak for everyone because each company has a different situation,” said the official. “The 80% number comes from asking companies about the general situation.”

But the businesses themselves are telling a very different story.

“From what I’ve heard here, the operation rate is more like 30% on average,” said Choi Dong-jin.

Park Yong-man, president of the sewing company Green Fabric, agreed that the rate was “probably less than 50%.”

The main reason the companies are underworked is because they’re having difficulty filling the gap in orders after the six-month layoff.

“The complex may be back to normal now, but it’s too late for a lot of us,” said Choi. “Ordering for the winter garment season is over, and orders for spring have almost closed. The only option left is to do something for next summer. A lot of buyers want to wait and see the next season.”

Machinery and electronics companies are having an even tougher time than the garment makers. They could end up out in the cold with clients unless they can guarantee a steady supply of parts.

“Textile companies have systems that are quick to adapt, but we deal in machinery and electronics parts and materials, so once clients have gone somewhere else, they usually don’t come back,” said Yu Chang-sun, president of SJ Tech, a company that produces semiconductor parts and hydraulic packing.

On Sept. 15, machinery and electronics parts and materials companies issued a statement calling for assistance from the government.

“Only 47% of the 45 parts and materials companies at the Kaesong Complex are operating,” it read. “Because of the uncertainty of the complex’s situation, normalization appears unlikely at this rate.”

Leaving companies most on edge are the signs that inter-Korean relations are growing rocky once again.

“Whenever relations go downhill, we’re left with this uneasy feeling that the complex could be shut down again,” said a businessman from a company who spoke on condition of anonymity. “Who’s going to place orders with a company when their supply might get cut off at any moment?”

“It’s going to be more and more difficult to recover the less transparent the complex’s situation is,” the businessman added.

Another businessman fretted that a recovery might be out of the question entirely if the complex experiences further problems.

“We’d appreciate the government’s help in ensuring that the complex is stable and the companies can take orders,” the source said.

As the difficulties mount, some companies are even reportedly considering pulling out of the complex entirely. Five of the 123 tenant companies have yet to go back on line at all.

Yang Bong-in, executive director of the thread processor International Silk Distribution, said that with orders gone and business conditions poor, the company is “choosing to watch how things go rather than starting up again right away.”

“We plan to decide on whether to start again by the end of this month, and pulling out is one of the options on the table,” Yang added.

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