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Investment environment in Rason Economic and Trade Zone

Nature and geography

Natural resources and infrastructures

Legal groundwork and economy

Finance, education and culture

Investment Projects

Projects for Development of Industrial Parks

Projects for Development of Tourist Destinations

Investment Projects for Local Industries

Investment Items

Investment Policy

Tax Policy

Procedures of Enterprise Establishment

Economic Cooperation Bureau of Rason Municipal People's Committee

Management Committee of Rason Economic and Trade Zone

Investment Items

1. Video Production

The global demand for video production, a safe and highly profit-making industry, is estimated at US$ 0.7 billion.

The Korean video products earn worldwide reputation for their high level of ideological artistic quality and techniques.

Total area: 2 000 m²

Floor space: 10 000 m²

Employees: 300

Estimated cost: US$ 10 million (when 200 videos are produced a year)

Profitability: Sales return US$ 5 million/year, Payback period 3.5 years (including 1.5-year construction)

2. Farming Implements Assembly

Development of agricultural mechanization contributes to satisfying manpower shortages and demand for farming machines, boosting production and protecting land. Farming machines are in great demand on the international market.

Total area: 20 000 m²

Floor space: 20 000 m²

Number of employees: 100

Estimated cost: US$ 10 million (when 22 000 small-size farming machines including sowing and thrashing machines) are produced a year)

Profitability: US$ 4 million/year, Payback period 5.5 years (including 1-year construction)

3. Automobile Accessories Production

Cars and other vehicles are essential for people’s life and enjoy a good demand.

Total area: 250 000 m²

Floor space: 60 000 m²

Estimated cost: US$ 1.5 billion (in case of annual production of 90 000 tons of bodywork moulding and casting of king-size lathes and accessories)

Profitability: Sales return US$ 50 million/year, Payback period 4.5 years (including 1.5-year construction)

4. Bus Assembly

In parallel with the development in national economy and rise in people’s demands for their material and cultural life the demand for buses of diverse kinds increases.

In the DPRK state measures are continuously taken to enhance the travel convenience of working people. An increasing number of people are visiting scenic spots across the country. The rising standard in their cultural life calls for meeting the demand for passenger buses.

At present, in the Zone there is the Samthaesong Automobile Assembly Plant. The plant plays an important role in satisfying domestic demand for lorries. Now that the experiences in and foundations for vehicle production and healthy environment for investment have been created in the Zone, investment in setting up new bus assembly line will adequately satisfy the domestic demand and open up prospects for vehicle production.

Estimated cost: US$ 15 million

Payback period: 8 years (including 1-year construction)

5. Processed Corn Production (10 000-ton /year)

Processed corn products are used in foodstuff, pharmaceutical, chemical, textile, paper-making and many other industries and highly economic. Experts claim that use of processed corn is profitable five times more than that of raw materials. Also corn processing reduces environmental pollution and makes it possible to produce albuminous fodder badly needed for stockbreeding.

6. Wind-power and Solar Energy Generators Production

Highly efficient and less noisy vertical-shaft wind-power generators and compound series of wind-power/solar energy generators to be installed at squares and skyscrapers are to be produced.

Total area: 10 000 m²

Floor space: 6 000 m²

7. Microscopic Enzyme (Compound Enzyme) Industry

Enzyme is the most important material in microorganism production. Its varieties are gradually increasing and the scope of its use and demand is expanding, so its prospects are very encouraging.

Estimated cost: US$ 34 million

Profitability: Sales return US$ 40 million/year, Payback period: 5 years

8. Bio-diesel Production (50 000 tons/year)

This expected project is a new environmentally friendly industry to produce bio-diesel and the like which is mainly fed by wastes (oxidized oil and leftovers from soap and oil production) from vegetable oil production, and is based on modern technologies.

This substitute energy can be obtained by treating the residues from vegetable oil production by chemical ways. Therefore, it is of strategic importance.

Estimated cost: US$ 25 million

Profitability: Sales return US$ 45 million/year, Profit margin US$ 5 million/year

9. Phenolic Resin Production

Phenolic resin, as an agent for keeping warmth and resisting fire and noise, is far better than other compound resin materials. It is used in keeping warm the air-conditioning and cooling water systems as well as pipes and electric equipment in the petroleum, natural gas and chemical industries. In addition, it is used in keeping walls of industrial buildings and doors of warehouses that are liable to cause ignition resistant to fire and heat.

Phenolic resin is expected to be in great demand in market as it is the materials for foamed plastics that have been recently developed and a third-generation lagging materials.

Total area: 30 000 m²

Floor space: 12 000 m²

Estimated cost: US$ 14 million

It is expected to purchase 35 sets of major production facilities and produce and export 150 000-m² lagging sheets made from phenolic resin

10 Production of Materials for Artificial Plywood (100 000 m²/ year)

The materials will be made mainly from stems of a variety of crops such as corn, cotton, wheat, barley, bean and rice.

Resources for materials are abundant and production cost is low.

The expected products are fibrous sheets and patterned sheets and other kinds of artificial plywood products and are to be used in packing, architectural model formation and repair and maintenance.

No rejects will be expected. The products will be free from methanol and can be used as a substitute for timber. They are highly resistant to water, heat and noise and fire. They also keep warmth, cost low and favour environmental protection. These products are overwhelmingly popular in the market.

Total area: 20 000 m²

Floor space: 13 000 m²

Estimated cost: US$ 20 million

Profitability: US$ 19 million/year, Profit margin US$ 3 million/year

11. Wooden Compound Products(30 000-ton /year)

This project is aimed at producing fibrous and plastic materials with wastes from timber processing, fibre production for agricultural purposes and other collected wastes (PE, PP, PVC, etc) to be used for packaging, furniture fitting, agriculture, public transport and other fields.

Compared with wooden products, this product has many indifferent aspects from wastes.

Estimated cost: US$ 25 million

Profitability: Sales return US$ 33 million/year, Profit margin US$ 20 million/year, Payback period 2.8 years

12. PVC Pipe Production

PVC products are easy to erode, good in electric isolation, light in weight and high in strength.

The biggest consumption market for PVC products is architectural industry which accounts for 55% of use of PVC products. PVC products are usually pipes, hoses, sheets, moulds, doors, windows and electric cables.

The demand for PVC products is expected to rise and necessitate a wider market.

Total area: 8 000 m²

Floor space: 20 000 m² (including 50 000 m² for shop floor, 2 000 m²for warehouses and attached buildings and 1 000 m² for office building)

Estimated cost: US$ 20 million

Profitability: Sales return US$ 11 million/year, Profit margin US$ 5 million/year

13. Introduction of Sewage Purification Technology

It is expected to introduce MBR, a modern technology, and build filtering sieges and lines and a research institute.

The project expects to produce and export filtering equipment (3 000 sets) and sieges (one million square metres) from filtering every year.

Floor space: 60 000 m²

Estimated cost: US$ 34 million

14. Insam Cosmetics Production

Since ancient times, Insam has been called as the “king of a hundred medicinal herbs” and is said to protect your life and gives you full vigour in the medical world of the East. It contains several kinds of polysaccharide.

Its extract is slowly absorbed into the skin causing no harmful irritation. It helps to extend skin capillaries, promote blood circulation of skin, raise the nutrition of skin and control normal balance of skin. It also prevents dehydration, sclerosis and skin wrinkling.

Long use of insam products will improve your skin’s elasticity and produce new cells. And activators extracted from insam suppress the occurrence of melanin and make skin glossy. So, they are considered as the first-rate skin-beauty promoter.

As the people have a deep understanding of the medical effect of insam and put it in wide use, insam products enjoy great popularity among consumers and are in growing demand.

According to statistics, the demand of skin products which prevent wrinkles and senility is expected to increase at the rate of 18 per cent every year.

Estimated cost: US$ 16 million

Profitability: Sales return US$ 8 million/year, Profit margin US$ 3.6 million/year

15. Manufacture of Insam Products Using Variation Technique of Insam Glycoside

This project is aimed at producing insam glycosides FGM1 and FGM4 through advanced technology, so that human body can absorb them completely.

The products, which have been developed by latest science and technology, produce safe and marked medical effect. No side effect has been recorded.

The variation technique of the insam glycosides has been used conventionally in producing medicaments, functional health foods, and chemical goods for daily use. The products will win great popularity on the market.

Total area: 40 000㎡

Floor space: 20 000㎡

Estimated cost: US$ 33 million

Profitability: Sales return US$ 34 million/year, Profit margin US$ 15 million/year

16. Production of Black Mushroom Polysaccharide

Black mushroom has a rich amount of protein, sugar and other nutritive elements, minerals and low fat portion.

A 100g of black mushroom contains 12.1g of protein, 1.5g of fat, 35.7g of carbohydrate, 247mg of calcium, 29.9g of fibre, vitamins B1 and B2, inorganic salt and phosphorus fat and other elements. It also helps arrest blood reacting ingredients, decrease intensity of blood spot and promote blood circulation.

There is no doubt for markets.

Estimated cost: US$ 33 million

Profitability: Sales return US$ 34 million/year, Profit margin US$ 9 million/year

17. Natural Food Colourings Production (1 000 tons/year)

Red colour of red pepper and French marigold constitute the raw materials of natural food colourings.

The red colour is extracted from red pepper, dissolved in fatty oil and made as a watery dispersive colouring through special processing.

It resists light, heat, acid and salt and is not affected by metal, so it is applied to such various foods as sea foods, meat, rice cake, salad, canned foods and drinks, medicaments and cosmetics.

Yellow colour is extracted from French marigold. It has such features as beautiful colour, high stability and resistance to oxidation. It is used for colouring rice cake, confectionery, cosmetics, cigarettes and feeds.

Recently a country developed natural food colourings of more than 60 kinds. In that country over 100 plants are engaged in producing natural food colourings. Their annual output exceeds 14 million tons, which account for 52 percent of food colourings in need. These two natural colourings have been verified through medical study. They give fresh and stable feelings and are good for health.

They are widely used in producing natural health foods and green organic foods, which offers a good opportunity for export.

Seven hundred tons of colourings from yellow leaves and 300 tons of colourings from red peppers are expected to be produced on an annual basis.

Total area: 30 000㎡

Floor space: 10 000㎡

Estimated cost: US$ 13 million

Profitability: Sales return US$ 14 million/year, Profit margin US$ 2.5 million/year

18. Building of Omija (Schizandra chinensis) Production Base

The Zone provides favourable environmental conditions for cultivating omija of highly nutritive and medicinal value. Omija invigorates you and makes you feel at ease. It is used for those who have weak lungs and heart and suffer from coughing, chronic diarrhea, thirst, nervous prostration, amnesia, insomnia, and acute and chronic hepatitis. Not only medicament but also liquor and syrup with peculiar taste are made from omija.

Omija serves as a main material for production of reserve medicine, health products and alcoholic drinks. Therefore, it is in great demand in domestic market.

Particular attention is paid to omija in Asia, Europe and other regions.

The base will undertake research and cultivation of omija. The expected annual output of omija processed products are 5 000 tons of juice, 300 tons of dried fruit, 200 tons of syrup and 300 tons of tea.

Total area: 50 000㎡

Floor space: 10 000㎡

Estimated cost: US$ 6.6 million

Profitability: Sales return US$ 8 million/year, Profit margin US$ 1.7 million/year

19. Disposable Chopsticks Production

Chopsticks are one of the most important mealtime tools for the people living in northeast Asian countries. Currently, the chopsticks available on the market are made by spending huge volumes of wood. In particular, the production of disposable chopsticks is a main factor for destroying forest resources.

It is planned to produce disposable chopsticks by means of high temperature and high pressure using edible adhesives and waterproof agents, with rice and maize straw and other agricultural byproducts as raw materials, so as to protect forest resources and ecological environment.

The core technique is to produce safe, nontoxic and harmless edible adhesives.

Estimated cost: US$ 5 million (US$4 billion/year)

Payback period: 10 years

20. Pulp Production by Coal Breeze

Coal is widely used as an industrial fuel in the DPRK. Accordingly, disposing of coal breeze presents itself as the most important matter.

It is planned to refine mineral fibre by processing coal breeze or slag scraps, industrial wastes, and produce coal breeze disposer with the mineral fibre as a material, thereby extracting mineral fibre pulp needed for making paper.

The modern technique to be applied makes it possible to make paper with mineral fibre pulp instead of using 20-50% of vegetable fibre, protect environment and lower production cost.

In addition, it is of great value in making a breakthrough in paper-making industry and protecting resources and environment. So, it is called a green circulation industry.

Estimated cost: US$ 29.76 million (0.3 million ton of mineral fibre/year)

Profitability: Sales return US$ 23. 81 million/year

21. Disposable Food Container Production

As environmental protection comes up as an important issue, the rate of use of food containers made of synthetic resin is on a gradual decrease, whereas the demand for disposable food containers is on a rapid increase. Disposable containers are in wide use in tourist regions and public transport sectors in particular.

The total sales return is estimated at approximately US$ 0.7 billion if one container costs US$ 0.06.

High-quality and low-cost disposable food containers are in great demand even in neighbouring countries.

Estimated cost: about US$ 8.5 million (0.5 billion paper cups, 0.25 billion lunch boxes and 0.25 billion trays/year)

Profitability: Sales return US$ 10. 49 million/year

22. Straw Sheet Production

Vinyl sheets for agricultural and industrial purposes and disposable use can be made with straw which comes from agricultural production. They are in wide use and have good prospects for marketing.

They are more durable than polyethylene sheets with a thickness of 2 ㎛ and 85.6% rate of light projection. They are technically at or above the same level with polyethylene sheets. The advantage is that it takes only 3 months for their natural decomposition under a given condition and their production leaves no residues and does not cause any pollution. They can be used in place of organic fertilizer.

Estimated cost: US$ 18. 27 million for 20 000-ton output/year

Profitability: Sales return US$ 19. 56 million

23. Colour-Paper Wrappers Production

The growing demand for paper wrappers in the market has led to the development of commodity packaging. Originally, usefulness and environmental protection are the main factors in wrappers production.

There are no color-paper wrappers plants in and around the Zone.

Estimated cost: US$ 0.81 million

Profitability: Sales return US$ 1.85 million/year

24. Production of Recyclable Glass Products

Glass products are in widening use in parallel with the economic development and improvement of people’s material life.

Meanwhile, the resources of glass products are limited and wasted glass products are on the increase. This requires a drastic rise in recycling of glass products.

In the Zone 200 000 glass bottles (about 40 tons) and panes of glass (10 tons) are to be produced every year. It is planned to produce various kinds of glass products including panes of glass by increasing the rate of recycling glass wastes so as to satisfy the demand for glass products in and around the Zone.

Estimated cost: US$ 5 million

Profitability: Payback period 6 years

25. Production of Renewable Synthetic Plastic Goods

Synthetic plastic wastes collected in Rajin and Sonbong areas within the Zone amount to 100-150 tons at minimum. If the waste resources of the surrounding areas are included, the amount will increase to 500 tons. Therefore, it is planned to satisfy the demand for materials of synthetic plastic products in the Zone and its surrounding areas by increasing the rate of recycling synthetic plastic wastes.

Estimated cost: US$ 2 million

Profitability: Payback period 4 years

26. Medical Kit

Disposable injectors, medical bandage, gauze and injector needles of various sizes are in growing demand in everyday life and development and production of medical kit is of great significance. Accordingly, in the Zone there is an enterprise which specializes in development, application and production of Koryo medicines. The enterprise satisfies the demand for Koryo medicines in and outside the Zone. If a medical kit production plant is established, it will guarantee an integrated production of medicine and medical apparatuses.

Estimated cost: US$ 2 million

Payback period: 4 years

27. LED Lights Production

Every family is using at least 2-6 illuminators, and the demand for special illumination including TV and computer screens promises an enormous market.

Total area: 20 000㎡

Floor space: 15 000㎡

Employees: 300

Estimated cost: US$ 50 million (0.24 billion LED lights/year)

Profitability: Profit margin US$ 18 million/year, Payback period 4.5 years (including 1.5-year construction)

28. Solar Panel Production

Solar energy is safe, reliable and renewable as a lasting energy source. It causes no pollution, and defies limitations. As for solar panels, the rate of failure is low and repair and maintenance are simple. Today global demand for solar panels amounts to 5 million kW.

Total area: 27 000㎡

Estimated cost: US$ 150 million (solar panels with capacity of 30 000 kW/year)

Profitability: Profit margin US$ 37 million/year, Payback period 5.5 years (including 1.5-year construction)

29. Remote Electronic Switch Production

Demand for switches is in astronomical numbers. Every family uses at least 4-10 switches and all industrial establishments use switches. All electric appliances have switches so there is an enormous market for this industry.

Total area: 20 000㎡

Floor space: 8 000㎡

Number of employees: 100

Estimated cost: US$ 8 million (for 4.25 million switches/year)

Profitability: Profit margin US$ 10 million/year, Payback period 2.5 years (including 1.5-year construction)

30. Linger Production

Demand for linger solution is also enormous.

Total area: 5 000㎡

Floor space: 8 000㎡

Estimated cost: US$ 10 million (50 million litres of linger solution/year)

Profitability: Profit margin US$ 5 million/year, Payback period 3.5 years (including 1.5-year construction)

31. Glucose Production

Glucose accounts for at least 50% of all the energy needed for human race or animals. It is made in the following industrial way: Starch is hydrolyzed with diluted mineral acids (hydrochloric and sulfuric acids). The hydrolyzed solution is neutralized, decompressed, concentrated and decolourized. Again it is concentrated and crystallized.

Glucose is used as a raw material or an additive in foodstuff, fermentation, medical, leather and chemical fibre industries so its market is huge.

Total area: 60 000㎡

Floor space: 20 000㎡

Number of employees: 250

Estimated cost: US$ 20 million (120 000 tons/year)

Profitability: Profit margin US$ 6.2 million/year, Payback period 4.7 years (including 1.5-year construction)

Investors will be provided with preferential treatment for economic activities in the Zone according to the “Law on the Rason Economic and Trade Zone”.

Contact: Economic Cooperation Department of Rason Municipal People’s Committee

Tel: 0085-085-29-3017

Fax: 0085-085-29-3418

E-mail: rasondev@star-co.net.kp

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