The Korea Trade-Investment Promotion Agency (KOTRA) sends an investment delegation to Vietnam next month to look around industrial complexes located in Ho Chi Minh, Da Nang and Hanoi. Its purpose is to help South Korean firms currently located in the Kaesong Industrial Complex move their facilities out of North Korea in the wake of the recent shutdown of the complex in the North. To this end, the KOTRA recently organized the delegation with the Kaesong Industrial District Foundation. The delegation consists of five government employees and 26 employees from 20 corporations.
The firms in the Kaesong Industrial Complex are interested in moving to China and Indonesia, too. The KOTRA recently held a meeting with the Ministry of Trade, Industry & Energy as well to discuss how to assist in their transfer. At the meeting, participants said that their new destination should have a wage level close to that of the Kaesong Industrial Complex because an increase in production cost results in a deterioration of their product competitiveness. They also mentioned the necessity of infrastructure for a smooth continuation of production operations and proximity to South Korea. In this context, many of them expressed their preference for Southeast Asia.
The North Koreans who worked in the Kaesong Industrial Complex were paid US$160 a month on average. At present, the minimum monthly wage is US$155 in Vietnam, US$221 in Indonesia and US$262 in China. Those of Cambodia and Myanmar are US$140 and US$84 but they have the lack of industrial infrastructure.
“About 53 out of the 123 firms in the Kaesong Industrial Complex are interested in moving out of the North now and most of them picked out Vietnam in the recent survey,” the KOTRA explained, adding, “Some of the others chose Cambodia or India for lower labor costs.”