South Korean firms fear heavy losses from North’s seizure of Kaesong

Staff Report, AP

Seoul cut water and power supplies to the Kaesong industrial park in North Korea on Friday, a day after the North deported all 280 South Korean managers from the site.

North Korea prevented them from taking equipment and finished products, saying it has seized the site and its assets.

“I was told not to bring anything but personal goods, so I’ve got nothing but my clothes to take back,” a manager at an apparel company said.

Seoul’s unification minister warned the North not to damage South Korean property in Kaesong, but there was a despondent atmosphere as managers gathered for a meeting on Friday, fearing they have lost everything.

A suspension at the park for five months in 2013 cost South Korean firms 1.05 trillion won ($8.7 million), the Yonhap news agency said. This time, the loss of property, trade and contracts could exact a much higher toll on the 124 companies in Kaesong, Yonhap quoted factory bosses as saying.

On Friday, Seoul said it will help the firms with emergency loans and let them pay taxes and utility bills late.

Factories at the industrial park, which opened in 2004, made a range of labor-intensive products, ranging from clothes and watches to utensils.

They employed around 54,000 workers last year, paying the salaries to the state — a fact that rankled with South Koreans as the North plows cash into its military.

An entrepreneur based in Japan who had planned to travel to Kaesong this month has criticized the decision to close the site.

Zainichi business owner Do Sangtae, 74, of Toyohashi, Aichi Prefecture, has been working on improvements to cross-border rail links.

“We were searching for ways to contribute to improve relations,” he said Friday by phone.

He questioned whether tougher sanctions against North Korea by Japan, announced Wednesday, are the right answer. “I think that first we need to continue to look for ways to improve communications,” Do said.

  • 151E

    No surprise. You gotta expect collateral damage.