Naegohyang Joint Ventures is one of the fast-growing conglomerate-style corporations in North Korea.
Just as South Korea’s Lotte went from selling chewing gum to luxury hotels and amusement parks, Naegohyang appears to be reaching into as many areas of North Korean life as possible – even running an extravagant coffee shop in Pyongyang.
Naegohyang, which means “my homeland,” is well-known for its cigarettes: especially the 7.27s that Kim Jong Un has smoked on television and, it was revealed last year, are sold at a higher price than foreign brands.
It began as a tobacco company, but has since widened its scope to the sporting goods industry, and reportedly became known in the North through a soccer match for the 2010 World Cup at Yanggakdo Stadium in Pyongyang on 6 June 2009, the state-run KCTV reported in a video released in October 2016.
Before the game, according to the narrator, unknown individuals handed out Naegohyang-branded sports t-shirts to spectators at the 30,000-seat Yanggakdo Stadium. On that day, “the t-shirts replaced tickets for the game,” the video said.
Even though state media praised them for their generosity and patriotic spirit, initial coverage appeared reluctant to reveal who they were.
“We could not know who they were,” the narrator said.
Sports t-shirts were given out again to waves of spectators in 2015 when North Korea played Uzbekistan at Kim Il Sung stadium, with locals seen wearing the company-branded t-shirts and caps.
Those sports uniforms are made out of leftover raw materials from manufacturing, according to one source.
“When they receive bulk manufacturing orders from China, they normally receive 20-30 % more materials in case they make mistakes in the process of making clothes,” Kim Il-gook, who worked for the North Korean ruling party’s Office 39 before his defection to the South in 2016, says.
“North Korean workers minimize misproduction and make whatever they want with the leftover materials.”
“Sports enthusiasts used to think of foreign brands like Nike, Adidas, and Puma for sportswear, but nowadays Naegohyang is replacing them”
With its headquarters in Pyongyang’s Mangyongdae district, the company now runs two shops in the North Korean capital; the first opened in Munsu district in December 2015, and the other at Mirae Scientists Street in October 2016.
The Munsu shop is a three-story building which sells sports drinks and supplements on the first floor, sporting clothes and equipment on the second floor, and runs table tennis facilities on the third floor, the state-run media DPRK Today reported late last year.
“Shoppers also can find foreign sporting goods from different countries at this shop,” reported the state-run outlet Ryugyong.
State media has even claimed the company is in a position to compete with well-known western foreign sports brands.
“Sports enthusiasts used to think of foreign brands like Nike, Adidas, and Puma for sportswear, but nowadays Naegohyang is replacing them,” Ryugyong reported in 2016.
“Even though it’s a relatively young company, it’s comparable to those brand names in terms of quality and diversity of products.”
“I keep seeing their name on everything”
One regular visitor to Pyongyang said the company’s rapid growth was visible across the North Korean capital.
“Naegohyang is doing really well at the moment,” they told NK News. “They run the Snow White Cafe, and I keep seeing their name on everything.”
“I’m wearing one of their sports shirts right now in fact.”
Most private business is banned under DPRK law, and Naegohyang Joint Venture is owned by the state – or, more specifically, by the Ministry of People’s Armed Forces.
“It has no limitations on expanding its business,” Kim – the former Office 39 employee – told NK News, because it is protected by its proximity to the military.
The company also offers customized sports uniforms, and its equipment – such as table tennis court dividers – often appears on state TV when domestic competitions take place.
“It has no limitations on expanding its business”
Naegohyang also launched its own women’s soccer team in 2012, mainly composed of teenagers. But even though all the players on Naegohyang team are younger than players in other teams, they have shown better performance than any of their opponents – at least according to a narrator in a video published by the DPRK Today in January.
Last year the company introduced a locally made automatic soccer ball thrower, which won the 21st National Sports Sci-Tech Show in October, and has also been doing charity: visiting schools to install artificial grass on the soccer field and providing equipment and sportswear to children.
The company also appeared in the 13th Autumn Pyongyang International Trade Fair (PITF) last year, but it was not listed as one of the participating companies in this year’s 21st Spring Pyongyang International Trade Fair.
The incongruity of a cigarette manufacturer selling sporting goods and supplements notwithstanding, many questions remain unanswered about Naegohyang and its place – and links to the top brass – in North Korea’s increasingly flexible market.
But with a growing class of North Korean companies branching out into the consumer goods market, as well as Kim Jong Un’s stated goal to redirect the ruling party’s focus to “dramatically raise people’s living standards,” it seems likely we’ll hear a lot more from Naegohyang this year.
Edited by Oliver Hotham
Featured image: Uriminzokkiri
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