SEOUL, Nov.5 (Xinhua) -- Two South Korean companies in the Kaesong industrial complex have decided to close operations due to the unfavorable business conditions, sources said on Tuesday.
A textile manufacturer and an electronic parts producer have signed related contracts to sell their factories and land in the industrial complex, Yonhap news agency quoted the unification ministry and corporate insiders as saying.
They added that another small company that makes stuffed goods at a factory apartment run by the Korea Industrial Complex Corp. is also planning to abandon its Kaesong operations considering the increasing financial difficulties. "Concerns caused by a cooling off of cross-border relations after the Kaesong complex reopened are making it hard to secure orders, and there are growing fears that things will not improve in the near future," Yonhap quoted a corporate source as saying, who declined to be identified.
He said there are other companies who may decide to leave Kaesong if things don't improve soon.
Entrepreneurs said companies in Kaesong are currently operating at just 50 percent capacity since the park resumed operation on Sept. 16. Three out of the 123 companies in the complex have not restarted their factories.
Many companies are unsatisfied with the chaotic management in terms of travel, communications, customs and protection of South Korean workers.
It is reported that other companies decided to leave because they are unable to payback 176.1 billion won (165.8 million U.S. dollars) in insurance payments received from Seoul and the Democratic People's Republic of Korea (DPRK)'s demand of supplemental security income, equal to 60 percent of its workers monthly pay starting this month.
The unification ministry said it has been informed of these unfavorable conditions and some companies' decisions of withdrawing from Kaesong. But it said no formal paperwork for the transfer of assets or closure has been received yet by the Kaesong Industrial District Management Committee.
The ministry said the DPRK had canceled an investor relations event scheduled to hold in Beijing this week.
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