Gaeseong Companies Eligible for Emergency Funds

A Unification Ministry official says that South Korean companies operating at the Gaeseong Industrial Complex are eligible for emergency financial support provided by the Small and Medium Business Administration.

The official on Friday said the business association confirmed that the Gaeseong companies qualify for emergency financial aid. The ministry had previously said that support was limited to a dozen parent companies investing in the North and some 200 companies that process brought-in materials there, excluding 121 other firms that operate at the complex.

The official, however, said that due to limited resources, the state support will first go to general firms working on inter-Korean economic projects, and then processing companies, thereby placing the Gaeseong companies at lowest priority.

http://world.kbs.co.kr/news_print.htmang=e&No=73623&Category=News

Number of N.Korean Workers at Kaesong Increases Despite Inter-Korean Tensions

Complex has seen a steady increase despite strained relations between the two Koreas.

According to a report by the Ministry of Unification submitted to the

National Assembly, there are about 120 companies operating at the

complex employing over 44,000 North Koreans.

The number of workers continues to grow from 42,000 in January to

43,000 in April to 44,000 this month, the report said.

http://english.chosun.com/svc/news/printContent.html

More North workers at Kaesong

Despite tension over the sinking of a South Korean warship, the number of

North Korean workers at the two countries’ joint industrial complex has

reached the highest point since it opened in 2004, a government report

said yesterday.

The number stood at 44,000 as of June, 2,000 more than in January, the

Unification Ministry said in a parliamentary report, adding that 121 South

Korean firms are operating in the communist country’s border town of

Kaesong near the west coast.

The report suggests the factory park, considered the last remaining major

symbol of reconciliation, is growing despite South Korean measures aimed

at punishing the North for the Cheonan sinkig in March. Forty-six sailors

died in the attack.

North Korea denies that it played any role in the tragedy, but a multinational investigation pinpointed Pyongyang as the aggressor. Seoul banned cross-border trade late last month, and scaled down the number of South Koreans permitted to stay each day in Kaesong.

Last week, South Korean firms operating in Kaesong said they were seeking

rescue funds from the government because their businesses had deteriorated amid cross-border tensions. The complex opened in 2004 after the two sides’ leaders sides agreed on the venture in a summit in 2000.

http://joongangdaily.joins.com/article/print.asp

Firms and Workers Did Most for Korea's Growth, Poll Finds

Korea's national power was achieved through the hard work of domestic corporations and their staff since the outbreak of the Korean War in 1950.

This is according to a survey of 800 Koreans over 19 for the 60th anniversary of the fratricidal war.

The poll by the Federation of Korean Industries shows that 64 percent of respondents said companies and workers were the ones who contributed most to the nation's growth, followed by scientists, technicians and civil rights activists.

But 37 percent said they think the roles of domestic firms and their workers in Korea's economic advancement are not fully acknowledged. Some 67 percent said that the proudest accomplishment of the country is its rapid economic growth and democratization. Thirteen percent replied that they are proud of Korea's improved civil awareness, while others chose development in sports and culture as well as its strengthened foreign policy and ability to defend itself.

But more than 65 percent of the respondents said Korea's awareness of national security has weakened over the past 60 years, largely due to a change in perspective by those born after the 1950-53 war. And more Koreans think that economic cooperation between the two Koreas as seen in the Kaesong Industrial Complex acts as a diplomatic and security burden on Seoul rather than an aid in easing military tension between the two sides.

http://english.chosun.com/svc/news/printContent.html

N.Korea to Earn $10 Million for World Cup

North Korea will receive at least US$10 million from FIFA for fielding its national team in the World Cup. The figure amounts to three month's wages for the over 43,000 North Koreans working in the joint Kaesong Industrial Complex.

FIFA gives the 32 teams playing in the World Cup $1 million each for preparation costs. After playing three matches in the first round, each team is given an additional $8 million no matter if it advances to the next round or not. From this year, every club that has a player in the World Cup receives $1,600 per day, per player. The paid period begins two weeks before the opening of the tournament and ends a day after the final match of each contending team.

In this undated photo released Saturday by the [North] Korean Central News Agency, North Korean leader Kim Jong-il visits a newly built football stadium in North Pyongan. For North Korea, the period lasts until this Saturday as it plays

its final first-round match against Cote d'Ivoire on Friday. Less the three players who play for foreign football clubs -- Jong Tae-se, An Yong- hak and Hong Yong-jo -- the North will be given a combined $960,000 for the remaining 20 players on its team. Mostly soldiers, they are affiliated with six domestic clubs. FIFA's payment is made to each club, but as the North's are all state-run clubs, Pyongyang has secured at least $9.96 million so far.

If North Korea makes it into the qualifying round it will be awarded an additional $9 million. The teams playing in the quarter-final receive $14 million each and those in the semi-final $18 million each, while the winner takes home $30 million.

With its national team playing in this year's World Cup, North Korea has also signed a $4.9 million deal under which Italy-based sports apparel maker LEGEA will provide the North with jerseys and training gear for four years.

http://english.chosun.com/svc/news/printContent.html

UM: New Loans to SK Companies in Gaeseong Complex Premature

The Unification Ministry says it is premature to decide whether new loans

for companies operating at the Gaeseong Industrial Park will be needed.

A ministry official says that although the industrial park's companies are experiencing financial hardship, operating loans are not handouts from the Inter-Korean Cooperation Fund. The official added there is a difference between what the companies need and what they apply for.

In November 2009, the ministry decided to provide six billion won in loans from the Inter-Korean Cooperation Fund to 20 companies at the Gaeseong Industrial Park that were financially strained due to the deterioration of inter-Korean relations. However, only nine companies applied for funding amounting to one-point-seven billion won.

The association of companies operating at the complex held an emergency

board meeting on Thursday and decided to apply for more loans, as well as for the deferred repayment of loans they had already received. The requests were made to minimize losses from sanctions that followed North Korea’s torpedo attack on a South Korean naval warship.

http://world.kbs.co.kr/news_print.htm?lang=e&No=73431&Category=News

Firms in Gaeseong to Seek Deferment in Loan Repayment

South Korean firms in the Gaeseong Industrial Complex plan to request the government to extend the deadline for repaying emergency government loans provided on top of existing loans.

An association of South Korean firms operating in the Gaeseong park held an emergency meeting on Thursday and agreed to make the request in a letter to the Unification Ministry. The association noted that South Korean companies in Gaeseong are increasingly facing difficulties, including a drop in orders, in the wake of Seoul’s stern measures against the North for its attack against the Cheonan naval ship.

The association also plans to convene a general meeting next Thursday and issue a statement that would appeal to the government to suspend efforts to resume psychological warfare against the North and to remove regulations that limit the number of South Korean workers that can reside in the industrial park.

http://world.kbs.co.kr/news_print.htm?lang=e&No=73420&Category=News

N.Korea and China to jointly develop two N.Korean cities

North Korea and China have reportedly agreed to from a management committee

to jointly develop the Hwanggeum Plain of the North Korean cities of Nason and

Shinuiju. As inter-Korean relations head toward a crisis situation due to the

sinking of the Cheonan, China and North Korea have pushed economic

cooperation at a fast pace. The two countries agreed upon economic cooperation

during North Korean leader Kim Jong-il’s visit to China in May.

A North Korea-related source with knowledge of the discussions that wished to

remain anonymous said Wednesday that a party led by North Korea’s vice

minister of trade visited Beijing last week. The party agreed to form a join

development management committee to jointly develop with China the

Hwanggeum Plain of Nason (Najin-Sonbong) and Shinuiju. He said that the two

officials in charge would be the North Korean vice minister of trade and the

Chinese vice minister of commerce.

This indicates that Chinese investment in Najin Port and the Hwanggeum Plain will be carried out systematically through the joint committee, a government body, rather than through development companies. The source also said that North Korea and China plan to rapidly push the development of Nason and Shinuiju based on the joint committee that runs Kaesong.

The source said China and North Korea are considering plans to invest in the

region on a 50-50 or 51-49 basis, and Chinese firms that are considering

investing are scheduled to visit the region shortly for inspection. China also

reportedly agreed to provide the power for the region.

One diplomatic source in Beijing said despite the Cheonan incident, North Korean and Chinese officials are visiting one another’s countries to hold concentrated discussions on economic cooperation. He said it appears, with North Korea in a situation in which it has no choice but to depend on China, that the matters agreed upon during Kim Jong-il’s visit to China are being pushed quickly.

Meanwhile, an official delegation from China’s Jilin Province, led by Vice Governor

Chen Weigen, visited Pyongyang Tuesday and met with new Deputy Prime

Minister Ri Tae-nam to explain matters pertaining to the development of China’s

Changchun-Jilin-Tumen River Valley region and exchange views on the matters

agreed upon by the two nations’ leaders during Kim Jong-il’s visit.

A forty-member North Korean Workers Party delegation, led by Minister of Land

and Environmental Protection Kim Chang-ryong, is also currently on visit to

China. Chinese state-run media reported that they visited the Binhai New Area

region of Tianjin, a city visited by Kim Jong-il during his trip to China.

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Incheon Mayor-Elect Pledges to Resume Inter-Korean Projects

Incheon mayor-elect Song Young-gil on Wednesday pledged to resume an inter-

Korean exchange project that is on hold in the wake of the North sinking of the Navy

corvette Cheonan.

A spokesman for the mayor's team said inter-Korean relations are at a nadir due to

the Lee Myung-bak government, which "inherited former U.S. president George

Bush's failed hardline North Korea policy."

But the new mayor, from the opposition Democratic Party, "will take the initiative to

turn the relationship into a forum for reconciliation and exchange."

The spokesman said the city government will release W2 billion (US$1=W1,211)

from the city budget earmarked for inter-Korean exchange and cooperation the moment Song is

sworn in. The fund has been frozen since the central government halted all inter-Korean exchange projects except the joint Kaesong Industrial Complex over the Cheonan sinking.

http://english.chosun.com/svc/news/printContent.html

Gov't Allows Remittance for Imports from N.Korea

The Ministry of Unification authorized remittance payments to North
Korea upon receiving processed products from the North. A ban was
imposed on payments after the North was accused of sinking the
South Korean Navy corvette Cheonan.
According to the ministry, the payments are for importing products
manufactured from raw materials sent to North Korea before the ban
was imposed on May 24.
Since the ban, South Korean firms producing clothes in the joint
Kaesong Industrial Complex have raised complaints over economic
losses of more than US$180 million.
Meanwhile, the ministry also approved additional shipments of
humanitarian aid to the North worth around $250,000.

U.N. starts discussions on Cheonan sinking

The U.N. Security Council appeared to have begun discussing potential measures for dealing with Seoul’s claims that North Korea sank a South Korean warship earlier this year. The Council held the first round of informal discussions related to the sinking of the Cheonan after it received a briefing by a multinational team of investigators led by South Korea on Monday (New York time), diplomatic sources said Tuesday.
“This means that the discussion process has begun,” said one source on the condition of anonymity. He said that additional informal discussions would likely follow. The government here seemed to be expecting a chairman’s statement regarding the Cheonan. Officials stressed that such a statement would not be less significant than a resolution depending on the contents of such a statement.
In the document, the government is reportedly hoping to verify North Korea‘s involvement and demand an apology, along with a promise for preventive measures. The two Koreas on Monday respectively made their case to the15 members of the U.N. Security Council on how the organization should respond to the sinking of the Cheonan.
The multinational investigation team represented by South Korea’s U.N. Ambassador Park In- kook held a question and answer session after a screening of video footage showing North Korean torpedo parts being pulled out of the site of the sinking. Shortly after the two-hour session, the North Korean mission at the U.N. also briefed the Council to rebuke Seoul's claims.
In what was called an "informal interactive dialogue," the North claimed that it was not inolved in the Cheonan sinking in any way.
North Korea’s ambassador to the U.N. Shin Seon-ho reportedly said the North “was not related to the Cheonan.” He also said the forensic evidence presented by the multinational investigation team was “unacceptable,” according to Amb. Pak Dok-hun, deputy chief of North Korea’s mission at the U.N.
More such disputes between the two Koreas are likely to come as the North Korean mission said it would be holding a related press conference.
Seoul referred the Cheonan issue to the U.N. after the team in May concluded that a torpedo manufactured by Pyongyang had split the Cheonan in two, killing 46 sailors.
The two biggest factors in drawing out an effective U.N. response are China and Russia. The two nations hold veto power and may prevent the U.N. from taking punitive action against Pyongyang. France and the U.S. reportedly expressed support for the investigation results and called for a strong punishment of the North. 　
“We offered sufficient explanations,” Yoon Duk-yong, a scientist who headed the Cheonan investigation, told reporters after the briefing.
Yoon said his team also urged the Council to respond appropriately to North Korea’s provocations.
Following the briefing, the Security Council warned the two Koreas against escalating regional tension. South Korea has been upping the ante against the North in the aftermath of the investigation results.
President Lee Myung-bak pledged to take severe measures to promote national security, including those for punishing the North.
Inter-Korean trade has been halted, and operations at a joint industrial complex in the border city of Gaeseong are being kept at a minimum.
Seoul also said it would be re-engaging in anti-North Korean propaganda programs but the campaign has been put on hold following an explosive response from the North.
Pyongyang is said to fear such campaigns the most for they drive the North Koreans away from their regime. The North initially said it views the investigation and Seoul’s accusations as an “act of war.”
On Saturday, the communist regime threatened that its armed forces “will launch an all-out military strike” to blow up propaganda loudspeaker facilities the South has installed along the heavily armed border and turn Seoul into a “sea of flame.” Washington, Seoul’s strongest ally, has shown complete support for the Cheonan incident. For further consultations on the ship sinking and dealings with the North, Kurt Campbell, U.S. Assistant Secretary of State, is to visit Seoul for a two-day trip from Wednesday.
The visit comes less than a month since Secretary of State Hillary Clinton visited as a part of her Asian tour. Clinton at the time manifested staunch support for Seoul. Foreign Ministry officials here said the Cheonan, along with the schedule and agenda for the upcoming meetings between U.S. and South Korean foreign and defense ministers scheduled for July are expected to be discussed when Campbell arrives.
Among the officials the assistant secretary meets will be Vice Foreign Minister Chun Young- woo who is in charge of handling U.N. affairs.

http://www.koreaherald.com/pop/NewsPrint.jsp?newsMLId=20100615000563#

he buck should stop with Lee

While South Korea was burning up with World Cup fever, North Korea

once again threatened to turn Seoul into a “sea of fire.”

This can be regarded as a historic threat in the annals of communism,

having first been used to intimidate Seoul in 1994. It was a bluff, but an

effective one: South Korea cowered when Pyongyang issued its blackmailing threats. It remains to be seen if it will work again. Is defeatism endemic in

South Korea?

The North’s threats would not have worked against U.S. President Harry

Truman. As World War II came to an end in 1945, the United States, Britain, France and the Soviet Union divided Germany and ruled its two parts. In June

1948, the three Western forces planned to establish an independent West

German government in the region they occupied. In response to that, the

Soviet Union blocked off routes from western countries to the German capital, Berlin. The Soviet Union threatened to starve 2.5 million Berlin citizens and occupy the city.

Truman’s military, political and diplomatic advisers said to withdraw U.S.

forces from Berlin. They worried that another global war could break out if

the United States stood against the Soviet Union’s blockade.

Truman said flatly, “We stay in Berlin,” then he ordered the largest-ever airlift operation in history. The Soviet Union unsealed the blockade 11 months later. Truman proved how the courage of a president can change the course of history. If the United States had withdrawn from Berlin, the Soviet Unionwould have occupied the city and the reunification of Germany would have taken far longer

to achieve.

Sixty-two years later, President Lee Myung-bak is facing a critical decision.

He can delay resuming broadcasting propaganda and flying leaflets condemning the Kim Jong-il regime across the border. Or he can carry out sterncountermeasures for the March 26 attack on the Cheonan warship, as

he promised on May 24 in front of the South Korean people and the souls

of the heroes who died protecting their homeland.

Even before North Korea’s latest threat, the Lee administration seemed to

be wavering. The military appeared to give up the leaflet plan, and reduced

the number of loudspeakers it planned to install; it is doubtful that the

military will eventually resume its broadcasts. Diplomats also seem to have

backed down from their pledge to push for a “strong UN Security Council

resolution.” With this retreat, the Lee administration has given the wrong signals, both domestically and internationally. Because of it, the president’s perseverance and confidence will continue to be challenged. Lee wasn’t able to uphold law and public order in the summer of 2008, when protesters staged massive street rallies to oppose the resumption of U.S. beef imports. The same political forces will think they can weaken punitive countermeasures against the North this time, too.

If Lee gets weaker and falters, North Korea and China will continue to disdain South Korea. Kim Jong-il will harden his opinion that South Korea is run by cowards. When South Korea condemned China for receiving Kim Jong-il earlier this year, Lee expressed determined resolution through his public address, and China responded to that. Right after the president issued a resolute statement on May 24, Chinese Premier Wen Jiabao, who visited South Korea, said,

“China will realize justice.”

Since then, China seems to have reverted to its earlier position, neither

acknowledging the probe results nor agreeing to impose additional sanctions

on North Korea. Now, China is even pressuring South Korea. The Global Times,

a sister paper of the state-run People’s Daily, has bluffed:

“It would be difficult for South Korea to take even one step forward on the

Korean Peninsula issues without China’s understanding and cooperation.”

As head of state, Lee has to take ultimate responsibility for the nation’s

security. The Kaesong Industrial Complex will be a tricky problem, but Lee

should not give in to any threat. If North Korea destroys its loudspeakers,

South Korea should destroy the North’s artillery camps. North Korea would

not dare to initiate a massive military response, such as turning Seoul into

a sea of fire, because the North is afraid of a full-scale war. Such a provocation would mean the end of the North Korean regime.

Standing firm will send stock prices fluctuating and South Korean society

faltering. But the market will rebound within several days if Lee communicates determination to the people. Only then will the North and China change their minds about South Korea.Truman was a businessman who didn’t have a college diploma. He was called “a timid country boy from Missouri” due to his innocent and rustic style. But the timid country boy hung a framed note from writer Mark Twain in his office: “Always do right.” And in the end, his courage defeated the Soviet Union.

http://joongangdaily.joins.com/article/print.asp

Unification Minister to miss June 15 ceremony

Amid increased tensions and a widened rift between two Koreas over the

sinking of the Cheonan warship, the Ministry of Unification said yesterday

that its minister will not attend today’s event to mark the 10th anniversary

of the June 15 Joint Declaration.

The Kim Dae-jung Peace Center, a nonprofit organization formerly chaired

by the late president, has held commemorative ceremonies to mark the

2000 accord between him and North Korean leader Kim Jong-il each year

since 2003.

Unification Minister Hyun In-taek had been invited to this year’s event, but

the ministry said he had been scheduled to attend a National Assembly

hearing on foreign affairs and national security. Vice Minister Um Jong-sik

will attend in his place.

It is the second year in a row that the unification minister is skipping the

event. Hyun missed the ceremony last year, citing a conflict with a meeting

on the Kaesong Industrial Complex.

“The government has not changed its stance that it respects the spirit of the

June 15 Joint Declaration and hopes to discuss follow-up measures through

inter-Korean dialogues,” said Chun Hae-sung, spokesman for the ministry.

But, he added, “if North Korea is willing to develop the inter-Korean

relationship, it has to take measures such as apologizing for sinking the

Cheonan and punishing those responsible.”

Some civic groups in the South have criticized the South Korean government

for taking a too inflexible a stand against the North. The Rev. Han Sang-ryeol, a progressive activist, traveled to Pyongyang on Saturday to attend the 10th anniversary ceremony held in the North.

http://joongangdaily.joins.com/article/print.asp

Unification minister to skip event commemorating inter-Korean summit

Unification Minister Hyun In-taek, the chief government official handling inter-

Korean relations, made the decision not to attend an event Tuesday

commemorating the tenth anniversary of the June 15 inter-Korean summit.

This marks the second time a Unification Minister has not attended a June 15

commemorative event since the Lee Myung-bak administration came into office.

The June 15 Inter-Korean Summit 10th Anniversary Commemorative Event

Committee plans to hold an academic conference and dinner Tuesday afternoon atSeoul’s Grand Hilton Hotel, with the motto, “Let Us Return to June 15.”

During a briefing Monday morning, Unification Ministry spokesman Chun Hae-

sung said, “Due to previously scheduled events, the minister and vice minister

Uhm Jong-sik are currently unable to attend the June 15 Joint Declaration tenth

anniversary commemorative event organized by the Kim Dae Jung Peace Center.”

The ministry explained that Hyun must attend a National Assembly question-and- answer session in the foreign affairs, unification and national security ministries on Tuesday, while Uhm was previously invited to attend a consolation event for elderly separated families that will be taking place in Sokcho on Tuesday and Wednesday.

However, the Ministery of Unification released a notice at 6 p.m. on June 14 that

Uhm would attend the event to be held the next day. During the eighth anniversary event commemorating the June 15 Joint Declaration in 2008, the first year of the Lee administration, then-Unification Minister Kim Ha-joong, after a convoluted process, finally attended and gave a celebratory address in the capacity of government representative.

At last year’s ninth anniversary event, Hyun did not attend because of scheduling factors such as working-level talks for the Kaesong Industrial Complex. Then-Vice Minister Hong Yang-ho did attend, but did not deliver a celebratory address.

Jeong Se-hyun, former Unification Minister and vice president of the Kim Dae

Jung Peace Center, was critical of the decision.

“A Unification Ministry spokesman openly stated that ‘we respect the June 15

Joint Declaration,’” said Jeong. “For the minister of unification to say he will not

give a celebratory address lasting five minutes or so at the tenth anniversary

event because of his schedule at the National Assembly is nothing more than a

flimsy excuse.”

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Time for reflection over the state of inter-Korean relations

The June 15 Joint Declaration greets its 10th anniversary with an unprecedented

degree of deterioration in inter-Korean relations. The situation is so critical that,

far from holding an inter-Korean event to commemorate the day, we instead

must worry about the possibility of the outbreak of warfare. This situation

urgently calls for a change in frame of mind of North Korean and South Korean

authorities, and in particular the South Korean government, which holds the key

to improving relations.

The June 15 Joint Declaration was an historic document, the first signed in a

direct meeting between the leaders of North Korea and South Korea since the

Korean War. It provided the foundation for transcending a half-century’s worth of

distrust and antagonism and ushering in a new era of reconciliation and

cooperation.

While there were some twists and turns, steady headway was made in inter-

Korean economic cooperation, including the Kaesong Industrial Complex and Mt.

Kumgang tourism projects. There were also various humanitarian efforts such as

reunions of separated families, as well as vigorous activity in social and cultural

interchange and cooperation. More importantly, we gained the confidence to

resolve issues affecting the Korean Peninsula with our own strength, leaving

behind our previous dependence on outside forces. The fruit of these efforts was

the October 4 2007 Summit Declaration, which was a practical outline stemming

from the June 15 2000 Joint Declaration.

The current atmosphere in which all relations have been severed except for the

Kaesong Industrial Complex and North Korean and South Korean authorities are

leading the way in exchanging threatening language, is clearly abnormal. If thingsproceed in this manner, there will inevitably be an increase in military tensions and uncertainty as the wasteful confrontation wears on. The same outdated Cold War structure that we sought to end through the June 15 Joint Declaration has been recreated with an even more threatening aspect. Both North Korea and South Korea will likely suffer the effects of this, but there is no question that the greater blow will be suffered by South Korea, which has an open economy and high productivity.

The Lee Myung-bak administration must directly examine this crisis and seize the opportunity for a reversal. With the exception of the nuclear issue, the

competition in systems between North Korea and South Korea, whether economic, political or military, ended a long time ago.

In consideration of merely the yawning gap in national might, it is also clear that the principal responsibility for building a peace structure on the Korean Peninsula lies with Seoul. This is why a uniformly hardline response to the sinking of the Cheonan is undesirable. Indeed, the Cheonan incident is a good illustration of the failure of more than two years of policy emphasizing pressure on North Korea and demands for North Korean denuclearization before all else. The solution to stabilizing inter-Korean relations cannot come from any self-focused hardline response. It can only come from efforts at building a new situation that differs from the one we have seen seen to date.

The June 15 Joint Declaration is an important foundation, effective until the time

of unification. Both North Korea and South Korea should preserve the spirit that

informs this document and work to advance inter-Korean relations. The South

Korean government in particular should not simply call for changes from North

Korea, but instead should reach out first so that North Korea can progress in a

more positive direction.

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There’s an old Korean saying that the most talented merchants on the

peninsula hail from the industrial city of Kaesong, which today lies just

across the border in North Korea.

Lee Hoi-rim - late chairman and founder of OCI, which was formed in 1959

as Oriental Chemical Industries - gives that notion some weight.

Born in Kaesong in 1917, Lee started his professional career shortly after finishing

elementary school as a clerk at a store that sold silk. He experienced the intricacies

and financial complexities of the business world first- hand by putting in an ample

amount of elbow grease on the ground floor, learning from Kaesong merchants themselves rather than at a prestigious and pricey business school. The lessons he learned

at an early age helped Lee build a chemical giant that has endured for nearly half a century and now ranks as the country’s oldest company in the industry.

Today, Lee’s sons and grandsons embody the OCI founder’s spirit, which in

turn reflects his Kaesong roots.

Last year was particularly important for the chemical firm, as it celebrated

its 50th anniversary. To mark the milestone and reflect its transformation

into a company focused more on high-tech green energy, the company

officially changed its name to OCI from DC Chemical (which it had adopted

in 2001).

According to the company, OCI is an acronym for the company’s original

name - Oriental Chemical Industries - and is also meant to stand for Origin

of Chemical Innovation. The company said it needed to shift away from its past image as a relatively stodgy business and that its English name did not fully represent its new business areas.

"We are setting OCI up to be a global company,” Lee Soo-young, chairman

of the conglomerate, said during a ceremony last year to announce the

name change. “In a market that is dramatically changing, we will look to

maintain our assertiveness.”

Baik Woo-sug, the president of OCI, echoed those thoughts at the

ceremony.

“In changing our name we will prepare for the next 50 years by pushing

continuous change and innovation based on what we have achieved in the

first 50 years,” Baik said. OCI was the first company in Korea to establish a soda ash factory and helped boost the alkali industry here. Soda ash is the basic foundation applied in various products ranging from glass and soap to paper and paint. Today, OCI is a leader in its industry, specializing in inorganic chemistry,

petrochemical products and other areas.

In 2008 it embarked on a major effort to reinvent itself into a business

specializing in renewable energy, putting a primary focus on producing

polysilicon, which is used to develop solar cells and semiconductor wafers.

Analysts see this as a promising new market for the company.

“OCI performed well in the first quarter of the year, but in the second

quarter it will do even better, particularly because its polysilicon production

rate has been improving while the price of polysilicon is also on the rise,”

said Kim Jae-jong, an analyst with Woori Investment Securities.

Polysilicon prices in general have plummeted since 2008 due to over-

production, hitting a low of $52 per kilogram in March of this year

compared with $400 two years earlier. Early this month, however, the price

edged up to $53 per kilogram and is expected to continue to rise.

Kim said OCI has successfully switched its image from a leading chemical

company to a business focused on green energy.

“The company will likely continue to expand its polysilicon business, and

the contribution this product line is making to the company is currently

growing,” Kim said.

OCI has 18 subsidiaries, four of which are listed on the Kospi and another

two on the Kosdaq. In the first three months of 2010, the company’s net

profit shot up 133 percent from a year earlier to hit 105.5 billion won ($84.7

million). Sales rose 41.6 percent to 611.4 billion won, while operating profit

surged 62.5 percent to 146.3 billion won.

The company’s ability to position itself as one of Korea’s top conglomerates

is due in part to its tight-knit management team. Current OCI chairman Lee,

who was also recently chairman of the Korea Employers Federation business group, is the eldest son of the founder. His two younger brothers - Lee Bok-young and Lee Wha-young - run major OCI affiliates Samkwang Glass, a nonmetal mineral developer, and Unid, a chemical product manufacturer, respectively.

Lee Soo-young’s cousin Lee Geun-young is the chairman of another leading

affiliate called Union, which also specializes in nonmetal minerals, while his

sons Lee Woo-hyun and Lee Woo-jeong are deeply involved in the business

as well. The older son, Lee Woo-hyun, is currently the vice president of OCI

and the younger is president of Nexolon, an affiliate specializing in materials related to renewable energy. Before joining his father in 2005, Lee Woo-hyun worked in other fields such as finance and banking, where he developed an expertise in mergers and acquisitions as well as investing in the manufacturing industry. His younger brother was head of another affiliate, OCI Bullsone, before taking the top spot at Nexolon in 2008.

OCI Vice Chairman Shin Hyun-woo graduated from the same high school

as chairman Lee and is a specialist in the industry, as he headed a chemical

research lab between 1970 and 1986. Another OCI vice chairman, Kim

Sang-ryul, worked in the government and was once the vice chairman of

the Korea Chamber of Commerce and Industry. He graduated from the

same college as chairman Lee.

Chung Soon-chun, president of Sodiff Advance Materials, is a graduate of

the same high school the chairman attended, while OCI president Baik

graduated from the same high school as the chairman’s cousin, Lee Geun-

young.

Aside from these strong connections, OCI’s management team is at the top

of its game, said analyst Kim.

“OCI has been able to succeed because of its strong ties among top

management and the owning families,” Kim said. “They are quick and

effective in making decisions.”

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