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First inter-Korean joint venture launches in Pyongyang

All Headlines 11:51 October 30, 2008

By Shim Sun-ah

SEOUL, Oct. 30 (Yonhap) -- A rare inter-Korean joint venture firm will start operation in Pyongyang Thursday with a ceremony, company officials said, amid strained relations between the two nations.

While seventy-nine South Korean manufacturers are currently operating at the joint industrial complex in Kaesong, just north of the heavily armed inter-Korean border, no South Korean firm until now has managed to set up business in Pyongyang, the North Korean capital.

Pyongyang Hemp Textiles is a cooperative effort between the South's Andong Hemp Textiles and the North's Saebyol General Trading Co., with a total investment of US$30 million shared equally by the two sides, according to the officials.

Around 1,000 North Koreans will be working for the textiles and logistics firm, which is built on 47,000 square meters of land in Pyongyang, they said.

The ceremony comes after Pyongyang threatened to cut off all ties with Seoul unless its conservative government, led by President Lee Myung-bak, softens its stance against the North and ceases what Pyongyang describes as Seoul's "confrontational racket."

On Tuesday, the North's military also threatened to take "a resolute practical action" if South Korean civic groups continue to send balloons carrying tens of thousands of anti-Pyongyang leaflets over the North.

Seoul, which agreed with Pyongyang in 2004 to halt all propaganda activities along their shared border, had requested the groups to stop sending the leaflets. The civic organizations rejected the request.

A 254-member South Korean delegation left Seoul on a chartered commercial flight to Pyongyang on Wednesday to attend the ceremony, Kim Ho-nyoun, spokesman for Seoul's Unification Ministry, said in a daily press briefing.

"The delegation is the largest ever to visit North Korea under the current South Korean administration," the spokesman said.

Rep. Kim Gwang-lim of the ruling Grand National Party (GNP) is among those who visited the North Korean capital. A proposed visit by two other GNP lawmakers was rejected by Pyongyang for unspecified "internal issues."

The opening ceremony for the joint venture was delayed for close to two months due to deteriorating inter-Korean relations, which worsened after a South Korean woman was shot to death while traveling the communist country in early July. Pyongyang refused to apologize for the shooting, and denied requests from Seoul to cooperate in a fact-finding mission into the death.

The southern delegation will return home on Saturday after attending an investment briefing to be given by Pyongyang, as well as touring industrial facilities in nearby cities and hiking the North's famed Mount Paektu.


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