Archive for the ‘Manufacturing’ Category

Daewoo Shipbuilding [not] to invest in DPRK SEZ

Friday, February 10th, 2012

Pictured Above (Google Earth): The Hwanggumphyong and Wiwha Island SEZ on the Yalu/Amnok River which separates the DPRK and PRC.

On Friday, the Donga Ilbo reported that Daewoo Shipbuilding was going to invest in the DPRK’s Hwanggumphyong SEZ (see the original post below).  Today the report appears to be incorrect. According to the Wall Street Journal:

Daewoo Shipbuilding & Marine Engineering Co. on Monday shot down news reports that it had agreed to build a shipyard in North Korea.

“We don’t have any plans to do that,” a spokesman said.

According to some South Korean news accounts over the weekend, the company, which is the world’s second-largest builder of ships and whose controlling stake is owned by the South Korean government, had agreed to help a Chinese company develop an island off North Korea’s northwest coast, near the Chinese city of Dandong.

The DSME spokesman said the company held discussions with the Chinese company but isn’t close to an agreement.

The news accounts said DSME would build a shipyard that would be devoted to repair work. One report said the idea would be presented to DSME’s directors and announced in April.

The company spokesman said it’s unclear how the accounts originated.

See the original report bleow:

(more…)

Share

Abrahamian with a CNC update

Wednesday, February 8th, 2012

 

Pictured above: the DPRK’s two CNC plants mentioned in the post below. (L) Ryonha Factory in Pyongyang, (R) Ryonha Factory in Huichon

From the Choson Exchange web page:

The company that is tasked with producing and selling CNC is Ryonha, through its subsidiary, Unsan. The company had a booth at the recent International Trade Fair in Rason, held in North Korea’s Special Economic Zone in the far Northeast, bordering Russia and China. Their booth was staffed by a Vice President and – as one might expect – attracted lots of attention from the locals in attendance.

The president claimed annual exports of 30,000,000 euros to Europe, South America and South East Asia. He didn’t have exact details on profits, but mentioned that Unsan imported 10,000,000 euro worth of parts, mostly from Europe, such as control units and electronic relays Siemens and Arno. Their main CNC factory is 40,000 sq. meters and the “biggest in the world” according to the manager. They have two facilities, one in Pyongyang and one in Jagang with 12,000 employees in total. They want to open a factory in Rason, ideally without investors. Prices were said to be: 150,000 EUR for a European made CNC machine but only 52,000 EUR for an equivalent machine made in the DPRK, with the “same quality”.

Unfortunately for Ryonha, it seems to be a subsidiary of the Korea Ryonbong General Corporation, which is under UN sanctions as a WMD proliferator. This no doubt impacts Ryonha’s ability to market itself to customers abroad. Ryonha also doesn’t seem to have a website, which can’t help, either.

Should Ryonha’s parent corporation be taken off the UN’s list of designated proliferators, it will find easier access to a global CNC market that was $6.1 billion in 2007, before the financial crisis hit. The market has contracted since then, as the crisis left a global glut in inventory in 2009, which has taken well into 2011 to clear. The sharply reduced demand, particularly from automakers, has made the CNC market particularly competitive, though a sustained economic recovery would eventually drag the industry back up to pre-crisis levels.

It’s difficult to know what kind of impact Ryonha might have on the global CNC industry, as customers and vendors alike are probably reluctant to trumpet where their machines are made. One of the effects of sanctions has been that companies try to hide their tracks when conducting business with the DPRK, even when the industry is unrelated to sanctioned items. This is sometimes done through an extra layer (or two) of outsourced contracts, or with textiles, sometimes just label-switching. This is tough to do with bigger machines, of course, leaving North Korean CNC machines facing perhaps understandable prejudices.

Its impact on the domestic market will be more significant, of course, reducing the need to spend hard currency on imported CNC machines from China and elsewhere. Perhaps then, this import substitution will allow the DPRK to use that unspent capital on projects that actually benefit the daily lives of its citizens.

Read the full post here.

Share

Kim Jong-un makes over 61 onsite inspection visits

Tuesday, February 7th, 2012

Institute for Far Eastern Studies (IFES)
2012-2-1

Since Kim Jong-un’s first election as the vice-chairman of the Korean Workers’ Party Central Military Commission (CMC) on September 28, 2010, Kim Jong-un was reported to have made 33 accompanied onsite inspections with Kim Jong-il and a total of 61 visits at industrial sites.

Out of the 61 total visits, Kim Jong-un inspected the following industries: power/electricity (5 times); metal (3 times), machinery (12 times); agricultural (4 times); light (5 times); food (14 times); and industrial (4 times). Construction sites of Huichon Power Stations were visited four times while the Huichon Ryonha General Machinery Plant and the Kanggye General Tractor Plant were also visited multiple times.

Kim Jong-un’s “economic learning” began while accompanying his late father Kim Jong-il on onsite inspections. Even when Kim Jong-il was alive, Kim Jong-un was most likely to have made preliminary visits to these industrial sites for a closer assessment as a part of his duty as the vice-chairman of the CMC.

The significance of the recent visits mainly lie with inspections to the Huichon Power Stations (located in Jagang Province) equipped with 300,000 kW of power generation capacity. Huichon Power Station was an important national strategic project which was often emphasized by Kim Jong-il, “The construction of the power plant must be completed before the centennial birthday of the Great Leader (Kim Il-sung) with great efforts from the entire party, military and the people.”

The electricity produced at the Huichon Power Station is likely to be distributed primarily in the Pyongyang area around the two national holidays, the Day of the Shining Star (Kim Jong-il’s birthday) and the Day of the Sun (Kim Il-sung’s birthday). Currently, power line constructions are still underway in Pyongyang.

At Huichon, constructions of additional terraced power plants are under planning using the currents from the Yangtze and Cheongcheo Rivers. The electricity produced from these plants is likely to be distributed to the industrial areas in Jagang Province, which is central to the machinery and national defense industries.

Important policy implications can be found from Kim Jong-un’s past accompaniment to the Huichon Ryonha General Machinery Plant with Kim Jong-il. This plant is currently emphasized as Kim Jong-un’s accomplishment and revered as, “the industrial revolution of the new era,” and a “site of CNC (Computer Numerical Control) breakthrough.” In addition, Kim Jong-un’s economic leadership is acclaimed for placing prominence on the state-of-the-art technology and “knowledge-based economy.”

Kim Jong-il visited the Huichon Ryonha General Machinery Plant on October 28, 2011 with Kim Jong-un and inspected the CNC assembly line, CNC processing plant, and CNC machineries. He stressed, “Modernization must be promoted in all sectors and levels founded on the state-of-the-art technology. The achievements in the CNC technology should serve as the stepping stone to move forward toward a higher level of science and technology.”

Similarly on October 27, 2011, Kim Jong-il visited the Yangtze River Machinery Plant* with the younger Kim and stressed, “Powerful economic nation that we are seeking is knowledge-based economy which is only possible when CNC technology and automation is realized that can create material wealth through little resources, efforts, and energy.”

The “knowledge-based economy” will likely become the trademark of Kim Jong-un and esteemed as following the “teachings of Kim Jong-il.” Kim Jong-un’s recent industrial site visits were concentrated on the cutting edge production facilities equipped with modernized and automated production processes.

* NKeconWatch: I believe this name is an error and the correct location is the Jangjagang Machine Plant.

Share

DPRK steps up efforts to develop smartphone applications

Saturday, February 4th, 2012

According to Yonhap:

North Korea is stepping up efforts to develop smartphone applications, a move that underscores its commitment not to be left behind in the fast moving world of information technology.

Choe Hyok-chol, a North Korean professor, said research projects are under way to introduce Android smartphones, according to a video clip posted on YouTube.

He explained a bar code application on Android smartphones has improved the time it takes to recognize information contained in bar codes. The video appears to have been recorded on Oct. 27 when the North held an exhibition on programs.

The move comes as more than 1 million North Koreans are subscribed to mobile phone services provided by Egypt’s Orascom Telecom, according to a news report, in a sign of growing mobile penetration in the reclusive country.

The Android operating system is the most widely used smartphone software around the world with hundreds of manufacturers building handsets based on the free and open platform.

You can see the video clip on YouTube here.

Read the full story here:
N. Korea steps up efforts to develop smartphone applications
Yonhap
2012-2-4

Share

Enlarged plenary meeting of Cabinet held

Sunday, January 22nd, 2012

Pictured above (Google Earth) is Changsong Town in North Pyongan Province. This town is the home of the Changsong Joint Conference which was held in August 1962.  This meeting was referenced in the DPRK’s most recent Cabinet plenary meeting on the DPRK economy.

According to KCNA (2012-1-22):

An enlarged Cabinet plenary meeting was held.

Present there were Premier Choe Yong Rim and cabinet members.

Attending the meeting as observers were senior officials of the organizations under direct control of the Cabinet, directors of management bureaus, chairpersons of provincial, city and county people’s committees, chairpersons of provincial rural economy committees, chairpersons of provincial planning committees, directors of provincial foodstuff and daily necessities management bureaus and managers of major factories and enterprises.

Prior to the meeting, the participants paid silent tribute to the memory of leader Kim Jong Il.

The meeting reviewed the fulfillment of last year’s national economic plan and discussed how to implement the decision of the Political Bureau of the Central Committee of the Workers’ Party of Korea, joint calls of the WPK Central Committee and the Central Military Commission and the militant task put forward in the joint New Year editorial.

Vice-Premier Ro Tu Chol made a report to be followed by speeches.

The enlarged meeting set it as a priority task for this year to direct efforts into developing light industry and agriculture to improve the people’s livelihood and successfully carrying out the WPK’s prosperity-oriented strategy in the pilot domains and basic industries of the national economy upholding the flames of South Hamgyong Province. It also indicated the tasks and ways for it.

Also discussed was an issue of raising higher the flames of great innovation of South Hamgyong Province in the light industrial and agricultural fields.

The meeting mentioned the need to produce quality consumer goods favored by the people in the field of light industry and effect a decisive turn in development of local industry this year marking the 50th anniversary of the historic Changsong joint conference.

It also stressed the need for ministries and national institutions to help Changsong County in its industrial development.

Also discussed at the meeting were such issues as fulfilling the assignments for grain production for 2012 both in lowland and mountainous areas, making the best use of modern stockbreeding and poultry bases and large fruit and fish farms as well as the tasks for ministries and national institutions to preferentially supply materials, equipment and electricity to farming processes.

The meeting drew attention to the tasks for the industrial fields of electric power, coal, metal, railways and machine and construction and building materials, etc.

The meeting tabled the tasks for all ministries, national institutions and provincial people’s committees to lay their own scientific and technological foundations for stepping up the work for turning the economy into one based on technology in a forward-looking manner as required by the industrial revolution in the new century.

It also discussed the tasks for the fields of education, literature and art, public health, sports, capital construction, land management and urban management.

The meeting stressed the need for all economic officials to preserve the socialist principle and ensure profitability in economic management, operate and manage the economic work on the basis of detailed calculation and science as well as the need for ministries, national institutions and industrial establishments to set up strict order regarding planning, financial dealings and administration.

Relevant decisions were made at the meeting.

As premier of the Cabinet Choe Yong-rim has made quite a few prominent appearances in the DPRK media in the last two years which highlight his official efforts to improve the North Korean economy. His most recent public appearance (January 12) is reported to have been at the Jenam Coal Mine.

Kim Jong-un, however, is not a member of the Cabinet, so he did not attend the meeting. To date his legitimacy is being established through his relationship to Kim Jong-il/Kim Il-sung and as a leader of the KPA—rather than as a leader in the government or even the party (at least so far).

As a result, Kim Jong-un’s guidance visits have consisted almost exclusively of visits to KPA units.  In this month alone, he has visited the 105 Tank Brigade, KPA Unit 169, KPA Unit 3870, KPA Unit 354, KPA Unit 671, and the KPA soldiers constructing the Pyongyang Folk Village on the outskirts of Pyongyang. Uriminzokkiri has also credited him with spearheading the DPRK’s nuclear tests.

UPDATE: Here is Yonhap coverage of the meeting.

“Changsong Joint Conference”
The KCNA article prompted me to look into the “Changsong Joint Conference”, a term that did not ring a bell. The most recent reference I can find to it is this blurb from a March 2011 article in Korea Magazine:

The Changsong Joint Conference of Local Party and Economic Officials was held in August 1962.

The conference marked the beginning of developing the local industry throughout the country.

In recent years the county has made strenuous efforts to carry out the plan of the Workers’ Party of Korea for the building of a thriving nation and achieved many successes.

Hundreds of hectares of forests of raw materials and timber forests including pine-nut, wild-walnut and larch forests have been newly created.

The Changsong Foodstuff Factory gathers in scores of kinds of wild fruits including acorns, wild grapes, fruits of Actinidia arguta and Crataegus pinnatifida every year in mountains.

Recently its officials and workers have modernized all production processes including wild fruit drinks and wines as required in the IT age to produce foodstuffs in time.

Wines made from the fermented juice of wild grapes, fruits of Actinidia arguta and other wild fruits, Crataegus pinnatifida, Rubus crataegifolius, carbonated Actinidia arguta and other fruit juices, dried bracken and sliced bracken and other wild vegetables preserved in soy sauce are in great demand for their peculiar flavour.

The Changsong Textile Mill which started operation with six housewives has been turned into a modern fabric producer. As a treasure mill, it makes a great contribution to the improvement of the people’s standard of living. It produces quality fabrics, woolen knitted goods and quilts and blankets with local raw materials.

The Changsong Paper Mill produces paper from ground pulp. It has streamlined the equipment to improve the qualities of goods.

Looking round the local-industry factories in Changsong County in November last year, Kim Jong Il kindled the flame of developing the local industry throughout the country after the model of Changsong.

Changsong County stands at the head of development of local industry. Now its people work harder to change further the looks of their home village.

Another blogger seems to have located a single page of a book on the Changsong Joint Conference. Fortunately, he typed out the introduction:

The great leader Comrade Kim Il Sung had made a farsighted plan for bridging the gap between town and country and between regions and raising equally the living standards of all the working people. For this Changsong County had been taken as a model.

The great leader who had long pushed preparations for rapid improvement in the livelihood of the mountain peasants, studied deeply the state of affairs in this part of the country, and through his several on-the-spot guidances, paved the shortest cut to establish a socialist paradise.

In August 1962, in order to spread the example of Changsong across the land he convened the historic Changsong Joint Conference of Local Party and Economic Functionaries. There he put forward a new policy and overall ways and means to enhance the role of the county and develop local industry and agriculture, so as to improve radically the people’s living conditions.

In 1974, our people erected in Changsong the historic monument to the on-the-spot guidance of the respected and beloved leader Comrade Kim Il Sung, out of their wish to retell throughout generations the profound care of the fatherly leader who had shown the bright future of mountain villages and transformed that area into a people’s paradise fine to live in.

Kim Jong-il last visited Changsong in November 2010 where he visited the Changsong Foodstuff Factory, Changsong Textile Mill, and Changsong House of Culture. The first two locations are the shining examples of the success of the Changsong Joint Conference.  The Changsong House of Culture is where the meeting was officially held in 1962.

But if the goal of the conference is to reduce the disparity in the DPRK’s living standards, Changsong is probably not the best place to start. Changsong is home to one of the North Korean leadership’s most well-known luxury retreats.  This is because it was was extensively photographed by Kenji Fujimoto while he was working as Kim Jong-il’s personal chef.   See a satellite image and Mr. Fujimoto’s pictures of the compound here. You can see the Taegwan leadership train station Kim used to visit the compound here.

Share

Koryo Tours launches “Heavy Metal” Tour of the DPRK

Thursday, December 1st, 2011

According to the latest Koryo Tours newsletter:

For the past two decades, Koryo Tours has been opening North Korea to tourism, and in 2012 we are once again breaking new ground. After working closely with our Korean partners, we are proud to offer both our group and independent tourists the chance to go where no visitor has ever been, namely factories and similar sites around Nampo, the west coast port city not far from Pyongyang. Here’s a brief introduction to what is on offer:

Chollima Steelworks – A major heavy industry site for the Democratic People’s Republic of Korea (DPRK), this place was built by the Japanese and is known to Koreans as the birthplace of the Chollima movement, which even today drives the country. If you’ve always wanted to witness the making of ‘Juche Steel’ in a giant facility, come to Nampo with us. This is the DPRK’s most famous factory, and as always, Koryo Tours are the first company to be allowed to take tourists inside. But Koryo has its own Chlima connection; we can tell you about the art project we arranged at the steelworks as well as the scenes we shot there for our new feature film!

Tae’an Heavy Machine Tool Complex – This enormous complex boasts a number of hangar-sized buildings; we will see the vast range of machine tools, lathes and so on that the workers use to make shaped steel, turbine components, and other products.

Tae’an Glass Factory – This opened in 2005 with heavy Chinese investment, in fact, the Peoples’ Republic of China President Hu Jintao attended the opening ceremony along with DPRK leader Kim Jong Il. Tae’an produces glass and glass products for the domestic market. Koryo tourists will be the first visitors ever to watch the process from smelting to sheet-cutting, and even try to break a sheet of strengthened glass!

Nampo Taekwondo School – Many of the DPRK’s champion martial artists have been educated at this school, despite looking from the outside like it badly needs some maintenance the demonstration put on by the students here (aged from 6 – 16) is a mind-blowing masterpiece of the indigenous Korean fighting style – it’ll make you think twice about arguing with little girls in future!

Nampo Park – With a scenic view over the mouth of the Taedong River, as well as a fresh-water swimming area ideal for warmer months, this is a great place to relax or have a picnic. A popular wedding photography site, this picturesque park makes a pleasant diversion after the heat and noise of the factories.

As if factories, martial arts schools and rustic settings aren’t enough, we can also take you to a local restaurant in the city centre, an orphanage, and you can cap off the trip by visiting the nearby 8km-long West Sea Barrage and staying overnight at the Ryonggang Hot Spa Guesthouse

Keeping with our tradition of travel innovation, Koryo Tours would love to show you the face of DPRK no visitor has seen before. Come see the world’s most mysterious country with the only DPRK specialists around; contact us on [email protected] or pop in and see us if you’re in Beijing or Shanghai. For anyone planning a DPRK trip, whether it’s your first visit or you’re coming back for more, Koryo Tours is glad to offer you the chance to do and see more than ever before. We look forward to hearing from you!

We are adding these new attractions to the following tours, so if you’ve ever wanted to see Juche Steel (it’s a real thing!) being made, watch a load of sand turn to glass, see North Koreans operating lathes of all kinds, and see a young child beat up several surly attackers then one of these tours could be perfect for you!

Share

Some new Google Earth imagery…

Monday, November 28th, 2011

Google Earth is offering some new imagery of the DPRK so I wanted to point out a few of the new locations we can identify.  The Pyongyang imagery is dated 2011-3-15. The east-coast imagery is dated 2011-5-14.

1. Solar Equipment Center (태양열설비쎈)

(Google Earth Coordinates: 39.014504°, 125.662840° , Google Maps, Wikimapia)

Kim Jong-il visited this facility on October 9, 2011.  It produces solar water heaters (KCNA).

2. Kumkop (gold cup) Combined Foodstuff Factory (금컵체육인종합식료공장)

(Google Earth Coordinates: 39.009592°, 125.671213°, Google Maps, Wikimapia)

According to KCNA:

The factory produces rice cake, bread, confectionary, processed meat and drinks. It also has welfare facilities for its employees.

The drinks, including carbonated water and nutritious water, are made with natural medicinal materials good for recovery from fatigue and promotion of health.

3. New Taekwando Center construction:

 

(Google Earth Coordinates:  39.016453°, 125.681939°, Google Maps, Wikimapia)

This facility is due to be completed in July.  I am not sure what it offers that the other Taekwando Center located right next door doesn’t have.

4. Something new at the old baseball stadium:

 

(Google Earth Coordinates:  39.008113°, 125.679196°, Google Maps, Wikimapia)

5. Wonsan – Hamhung Road (Partial map):

(Google Earth Coordinates:  39.421286°, 127.272296°, Google Maps, Wikimapia)

Read more about this road here.

6. And not really new, but Kim Jong-il recently visited the wind power farm of KPA Air Force Unit 1016–so I thought I would post it:

This facility is located in Kwail County (과일군) at  38.442086°, 124.939944°.  I have also marked it on Wikimapia and Google Maps.  According to KCNA:

[Kim Jong-il] toured a wind power plant built by the unit. After being briefed on the plant, he went round its inside and outside to learn about its construction and output of electricity.

Very pleased to hear that servicepersons of the unit successfully completed the plant with high output capacity in cooperation with Kim Chaek University of Technology and scientific institutions, he gave a high appreciation of their merit.

I am relaxed to hear that pilots and servicepersons rejoice at the plant as they can freely use enough electricity for combat preparations while cooking and heating with it, he said.

Being told that the plant freed the unit from the shortage of electricity and some of excessive power is supplied even to a bathing resort in the unit’s stationary area, he said with high appreciation that the People’s Army has done good things for the people.

After his inspection, Kim Jong Il gave the accompanying commanding officials and staff members of the KPA Supreme Command precious teachings needed to further strengthen the KPA into an invincible revolutionary army of Mt. Paektu and thus defend the socialist motherland as firm as a rock.

Just east of this facility is an air force base, so it is reasonable to assume that this is the home of KPA Air Force Unit 1016:

This wind power farm is not the KPA Air Force’s only or even largest experiment with wind power. Below is a Google Earth image of a facility in Ongjin County:

This facility is located in Google Earth here: 37.941508°, 125.409778°. I have also tagged it on Wikimpaia and Google Maps. It contains four wind turbines on two different sites (as of 2010-7-4).

I have uploaded a short clip to You Tube that is taken from North Korean television.  It shows a romanticized account of the installation of these specific wind power turbines.  You can see the clip here.

Share

Greece seizes DPRK-made chemical weapons suits

Wednesday, November 16th, 2011

According tot he AFP (2011-11-16):

Greek authorities seized almost 14,000 anti-chemical weapons suits from a North Korean ship possibly headed for Syria but did not disclose the find for nearly two years, diplomats said Wednesday.

The seizure was reported to the UN Security Council, which discussed the monitoring of nuclear sanctions against the isolated North, diplomats said.

The Greek operation was carried out in November 2009 but only reported to the United Nations in September, a diplomat told AFP on condition of anonymity in confirming the number of suits to protect against chemical weapons involved.

“It seems the shipment was headed for Latakia in Syria,” a second diplomat said, noting that the Greek report to the council did not mention Syria.

“There is increasing concern because more and more of the violations before several sanctions committees seem to involve Syria.”

Syria has already been linked to breaches of an arms embargo against Iran.

Both diplomats spoke on condition of anonymity as the report by the chairman of the North Korea sanctions committee, Portugal’s UN Ambassador Jose Filipe Moraes Cabral, was given behind closed doors.

The UN Security Council ordered tough sanctions against North Korea after it staged nuclear weapons tests in 2006 and 2009.

The North pulled out of nuclear talks with China, the United States, Japan, Russia and South Korea in 2009 and efforts to kick start negotiations are struggling, with the United States and its allies saying that North Korea is not serious about disarmament.

In a comment sent on an official Twitter account, a British diplomat said it was “clear that North Korea (is) still violating” Security Council resolutions.

“Strong concerns in council about the ongoing proliferation efforts,” added a German diplomat. Neither mentioned the seizure of the anti-chemical weapons suits.

Additional Information:

1. Here and here are the two UN panel of Experts reports on the DPRK which detail other UN embargo violations.

2. The Security Council this morning extended the mandate of the Panel of Experts helping monitor sanctions on the Democratic People’s Republic of Korea for an additional year, until 12 June 2012.

3. Here are links to embargo violations which I previously posted.

Share

Choson Exchange October trip findings

Monday, November 7th, 2011

From the Choson Exchange web page (November 5):

In October 2011, John Kim, a board director of the Choson Exchange, visited the Rajin-Sonbong Special Economic Zone. The following is a summary of some of his findings based on site visits and talks with senior officials in the SEZ. An longer account of his travels and impressions will be available soon. This information helps elaborate on our report from August.

Rajin Port
The Rajin Port employs 1400 workers. The Chinese have conducted feasibility tests regarding two new piers, but currently the port houses three piers with 9-9.5 meters draft. A 30,000 metric ton coal storage warehouse was built at Pier 1 by the Chinese, who moved 80,000 metric tons through the facility in five shipments from January to September. Pier two, largely dedicated to container shipment, is currently dormant and a Swiss company is currently using Pier 3 to ship manganese and talc out of the region. The Russians also have a 49 year lease agreement signed in 2008.

Oongsang [Ungsang] Port
Oongsang Port exported Russian lumber until 1985, but remains largely quiet now except for the occasional fishing boat. The present draft of 7 meters constricts any major future activity, so the North Koreans hope to bring in over $100M to widen the draft to 9 meters. After Rajin Port activity surpasses capacity there, Oongsang Port will become the next regional hub for drybulk activity.

Sonbong Port
Originally opened in the early 70’s, the draft within the port is 7 meters, but a fully laden Very Large Crude Carrier containing 270,000 metric tons of oil can offload at an offshore facility further out at sea. Two pipes, 63 cm in diameter, run for 9km underground before reaching the storage facility at “Victory Petrochemical”, a simple refinery that was designed to refine crude and send oil products (gasoline, naphtha, jet fuel, diesel and fuel oil) back to the port for export. In addition to this two way flow, fuel oil also arrived sporadically at the port as part of aid packages from 1994 to 2008.

Sonbong Power
This power plant was originally designed to take fuel oil from Victory Petrochemical as feedstock and generate power to feed back to Victory. Since the refinery has been offline, Sonbong Power has at times provided electricity to the region, but with fuel oil prices close to $700/metric ton and current electricity prices at 6.5 eurocents/kwh, the economics of running the plant do not work leaving the 800 workers employed here largely idle.

Victory [Sungri] Oil Refinery
Literally translated as “Victory Chemical Plant”, this refinery was completed in 1973 with a 40,000bbl/day crude distillation unit that typically yields 40~50% residual fuel oil for an average crude feed. Investment into upgrading capacity in the international market has led to an eroding of margins for simple refineries like Victory. Currently the refinery is idle and would need over $500M in investment to become competitive.

Hye Song Trading Company
Mr Kim visited a Sewing Factory owned by Hye Song, which runs 8 such factories employing 2000 workers. Output is recorded for the entire year on a bulletin board at the front entrance of the company. All employees except the handyman were women.

Cell Phone use more prevalent
The number of cell phone users in the DPRK crossed 1 million earlier this year and one official commented that the overwhelming majority of urban households have at least one cell phone. This particular official had 4 phones for a household of 3. Foreigners are allowed to use cell phones on a different network, and users of the domestic and foreign network can not call each other. All usage is prepaid.

Handset Type: Local
Purchase Cost: 1570-2200 RMB
Usage Cost: 250 minutes and 20 text messages, while each additional minute is charged at 60 NKW (about .1 RMB/min)

Handset Type: Foreigner
Purchase Cost: 1800-2400 RMB
Usage Cost: Does not include any free minutes and are charged at 2RMB/min

Banking System has room for growth
There are two banks in Rason, the Central Bank, which is focused on domestic transactions, and the Golden Triangle Bank, which is focused on foreign currency transactions. Transactions for goods and services are conducted almost entirely in cash, usually in RMB or NKW. Mechanisms for savings are credit have room for development. As banks take a fee to deposit and withdraw cash, merchants prefer to hold money in cash (usually RMB). Credit is also available almost exclusively through friends or family.

Bottlenecks
A number of issues require solving if Rason is serious about attracting large scale foreign investment. Among these are reliable access to travel visas, reasonable communications costs with the outside world, a more mature banking system with savings and credit mechanisms and favorable tax treatment with a consistent legal framework. The mere fact that Rason is experimenting with market reform is encouraging, and Mr Kim is optimistic about economic development in the region and the nation as a whole.

Share

DPRK highlights friendship with China through new stamps

Monday, November 7th, 2011

KCNA posted some new commemorative stamps today highlighting the friendship felt between fraternal socialist leaders (click images to see larger versions):

Kim Il-sung with Mao Zedong (L) and Deng Xiaopeng (R)

 

Kim Jong-il with Jiang Zemen (L) and Hu Jintao (R)

 

Chairman Mao as a youth

According to KCNA:

Pyongyang, November 7 (KCNA) — The DPRK State Stamp Bureau has published four sheetlets and an individual stamp to mark the anniversaries of the establishment of diplomatic relations between the DPRK and China and the entry of the Chinese People’s Volunteers into the Korea front.

Printed in the sheetlets are Korean and Chinese letters “DPRK-China Friendship” and “DPRK-China Friendship Is Everlasting”, as well as flags of two countries.

Seen in the sheetlets are portraits of President Kim Il Sung and leader Kim Jong Il and photos of Chinese leaders Mao Zedong, Deng Xiaoping, Jiang Zemin and Hu Jintao.

The stamps also carry pictures of Kim Il Sung and Kim Jong Il meeting with Chinese leaders.

The individual stamp contains an oil painting portraying Chairman Mao Zedong.

Share