960428

First S.Korean joint

venture to operate

in N.Korea

SEOUL: The first-ever joint venture plant between a South Korean firm and a North Korean partner is expected to begin operating next month, reports said on Sunday.

The domestic Yonhap news agency quoted industrial sources as saying Daewoo Corp 78000.KS, a unit of South Korea's giant Daewoo Group, and the North's Samcholli General Corp, have recently concluded an agreement on the establishment and operation of sewing and garment manufacturing facilities.

The joint venture, the first of its kind since the end of the 1950-53 Korean War, will be named "National Industry General Corp", the sources were quoted as saying.

The $5.12 million venture, to be set up in the port of Nampo that the Pyongyang government has been developing into an industrial complex, will employ about 1,300 North Koreans and some 30 from Daewoo. It will produce sewing goods and garments, including shirts and blouses, from three production lines.

Both sides have agreed that the Samcholli president will be the head of the joint venture with a senior Daewoo executive to be the vice president for the first three years.

Daewoo officials were not available for comment.

Last year, the Seoul government gave the go-ahead for Daewoo to set up the joint venture in the North.

On Saturday the government accepted applications from three major domestic companies - Samsung Electronics Daewoo Electronics and Taechang Co - to proceed with their plans for a combined $19.2 million worth of joint-venture projects with North Koreans.

The projects, all in the North, include a communications centre for Samsung, electrics and electronics plants for Daewoo, the electronics arm of the Daewoo Group, and development and sales of mineral water for Taechang.

The approval brought to 10 the total number of domestic firms eligible for joint venture projects in the North, including Daewoo Corp.

In November 1994, South Kroea lifted a ban on business trips to North Korea and allowed local companies to set up offices there, in an effort to ease tension between the two Koreas, still technically at war since the Korean War.

The cash-strapped Stalinist North has tried to attract investment by Western countries in its industrial projects.-Reuter