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Businessmen running factories in the joint Korean Gaeseong Industrial Complex hold a press conference on October 10, demanding that their investment be protected in the wake of North Korea's declared nuclear test.
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Several companies at joint Korean venture already packing up
Even before North Korea’s declared nuclear test, companies at the joint Korean Gaeseong (Kaesong) Industrial Complex faced growing difficulties with the increased souring of international opinion regarding the North. Now, after the North’s declared test, foreign buyers say that they will not purchase products made in Gaeseong, and some firms that have moved most of their production facilities to Gaeseong say they will have to close their factories. Currently, 39 South Korean companies are running or building factories at Gaeseong. The North’s declared nuclear test has dealt a serious blow to exporters. Daewha Fuel Pump Ind., a manufacturer of automobile parts, received a notice from a U.S. importer last weekend that it would stop deal with the Korean exporter. Daewha has decided to develop European markets which are affected less by the North Korean political situations or to focus on domestic consumption. Jaeyoung Solutec which produces electronic and automobile parts and Samduk Trading, a shoemaker, sell goods made at Gaeseong in South Korea and export domestically-made products to the United States. An official of Jaeyoung Solutec said, "Is there any reason why U.S. businesses would regard firms at Gaeseong positively?" Some companies are already moving facilities in the North to the South. Taesung-Hata Inc., a joint venture between South Korea and Japan, plans to bring production back to the South as early as next week. But Taesung-Hata’s problems go back further than the North’s test announcement. On a visit to Gaeseong this summer by foreign correspondents, it was reported that some of Taesung’s products were manufactured in North Korea. After that, a U.S. buyer stopped a more than US$300,000-a-month deal with the company.Companies that moved most of their production facilities to Gaeseong are hard-pressed to find alternatives. Bucheon Industrial, an electrical wire manufacturer, operates 10 production lines in Gaeseong, with 500 North Korean laborers on staff; the company only has five production lines left in the South. Jo Mok-hae, head of the company, said, "I trusted the government and moved to Gaeseong. But now I regret it." Romanson, a watchmaker that established a factory with several other firms, said it would reduce its output at Gaeseong. Go Mun-jung, head of Pyonghwa Trading Co., a shoemaker that had almost completed construction of a plant in Gaeseong, said, "I invested 2.1 billion won [US$2.2 million] in Gaeseong, but now I am feeling enormously uneasy. I hope that the government protects the facility investments of companies operating at the Gaeseong complex."
