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Jacob Fromer is NK News's Washington DC correspondent. He previously worked in the U.S. Senate.
A North Korean trading company wants foreign investors to chip in to a rubber factory on the country’s east coast, according to a posting on an official government foreign trade website.
The direct, public call for outside funding — $500,000 and an “in-kind investment of scrap & secondhand tires” — comes as the North continues to search for ways to bolster its economy despite a sweeping array of punishing sanctions tied to its nuclear weapons program.
It’s unclear when precisely the bid was uploaded, though it is believed to have appeared online in the past month.
According to the posting, a foreign investor stands to make $200,000 in profit on the project, at a plant called the Hamhung Daesong Rubber Processing Factory.
Any potential partner would, however, have to be willing to take the risk and evade sanctions to get it.
The UN currently bans all foreign joint ventures with North Korean companies.
Rubber exports to the North are not banned, however, unless they are classified as a luxury good or are connected to military use.
According to the posting, the funding request was made by a DPRK firm called the Korea Pochon Trading Company.
The company has previously been cited by the Panel of Experts — the UN body that oversees sanctions enforcement — for attempting to violate sanctions on luxury goods (specifically, gemstones).
The posting says the rubber plant’s products would be sold within the DPRK, and not sent out for export.
“This project is aimed at meeting domestic demands for rubber goods,” the posting says, adding that it expects to earn $2 million in annual sales and $800,000 in total profit.
Those goods include recycled rubber, rubber blocks, and rubber powder, according to the posting.
The Korea Pochon Trading Company’s request for foreign funding comes amid a long diplomatic stalemate with the U.S. over questions about sanctions relief and the future of the North’s nuclear weapons program.
The impasse has now dragged into the new year, with no obvious end in sight.
At a meeting with senior party leaders at the end of December, North Korean leader Kim Jong Un admitted that sanctions had held the DPRK’s economy back, according to the official Korean Central News Agency (KCNA).
He said that North Korea should prepare to “tighten our belts” going forward — but he also declared that he would rather his country forge ahead under the weight of sanctions than abandon its nuclear weapons program, which triggered many of the sanctions in the first place.
The U.S. has shown no willingness to ease off the sanctions, even as Russia and China have tried to convince members of the UN Security Council to do just that.
In December, the delegations from Moscow and Beijing circulated a draft resolution that would cancel many of the sanctions currently imposed on North Korea, but multiple UN diplomats told NK News in recent days that there was no broader interest in the proposal — at least not without a change in behavior from Pyongyang.
South Korea has expressed some of its own impatience with the current sanctions regime.
One of South Korean President Moon Jae-in’s top advisors said on Monday, during a visit to Washington, that “international sanctions prevent South Korea from engaging with North Korea.”
And President Moon, in a New Year’s address on Tuesday in Seoul, said that steps to improve cooperation between the two Koreas are now “desperately needed.”
But for now, the sanctions seem to be here to stay — yet the Korea Pochon Trading Company presented an optimistic tone in its pitch to foreign investors.
Under the heading of “current state and investment direction,” the company described a fertile ground for someone to come in and make money in the North Korean rubber business.
“With its processing workplaces & warehouses covering large area, skilled & experienced manpower, stable power supply being connected to national power grid, it has advantages of high production capacity,” the posting said, referring to the site of the rubber processing factory.
“Meantime, it is located nearby Hungnam Port, ensuring easy access to port,” it said.
The trade website, where the posting was uploaded, is run by the North’s Ministry of External Economic Relations.
One expert told NK News that even without sanctions in place, foreign money and joint business partnerships wouldn’t necessarily start flooding into the DPRK.
“What that country needs is a lot of foreign investment,” said Peter Ward, a writer and researcher focusing on the North Korean economy.
“But their attitude towards foreign investors means that up until now, China has been more enthusiastic to go all the way to Africa to build SEZs than it has to do so inside North Korea,” he added.
SEZs — special economic zones — are areas within a country that tend to have special laws promoting trade and investment.
Pyongyang’s goal, Ward added, has not changed: “autarky,” or economic self-sufficiency.
“And that, obviously, is likely not sustainable — as a development model, at least,” he said.
It is yet unclear if any foreign companies have responded to the Korea Pochon Trading Company’s request and made offers to invest in the project.
NK News attempted to contact the company via email but received an automatic bounce-back message.
Edited by Oliver Hotham and James Fretwell
A North Korean trading company wants foreign investors to chip in to a rubber factory on the country's east coast, according to a posting on an official government foreign trade website.
The direct, public call for outside funding -- $500,000 and an "in-kind investment of scrap & secondhand tires" -- comes as the North continues to search for ways to bolster its economy despite a sweeping array of punishing sanctions tied to its nuclear weapons program.