North Korea Industry

North Korea Country Studies index

North Korea - Industry

Development in Major Sectors

Growth in total industrial output was accompanied by changes in the composition of industry, but large gaps and inconsistencies in official statistics made it impossible to assess specific changes accurately. In 1965, the last year for which data were available for several sectors, the machine building and metal processing sector--the "engineering sector"-- accounted for the largest share of total industrial production-- 29 percent. This figure was a dramatic change from 1946, when the share of this sector was only 5.1 percent. Machinery building was regarded as the key to industrialization. The next largest shares in total industrial production in 1965 were 17.2 percent for textiles and 9.1 percent for the food processing and luxury goods industries. The share of the machinery manufacturing industry increased further to 33.7 percent of gross industrial output in 1980. Although the production of consumer goods was given more emphasis in the 1970s and 1980s, most economic resources continue to be devoted to the production of minerals, metals, and heavy machinery. In fact, most industry is located around the major mining and machinery manufacturing centers that form the focal points of the transportation and communications networks. At the start of the 1990s, the country had a variety of relatively well developed industries, and in per capita production of some industrial items was comparable to those of many middle-income countries.

Industry

North Korea's self-reliant development strategy assigned top priority to developing heavy industry, with parallel development in agriculture and light industry. This policy was achieved mainly by giving heavy industry preferential allocation of state investment funds. More than 50 percent of state investment went to the industrial sector during the 1954-76 period (47.6 percent, 51.3 percent, 57.0 percent, and 49.0 percent, respectively, during the Three-Year Plan, Five-Year Plan, First Seven-Year Plan, and Six-Year Plan). As a result, gross industrial output grew rapidly.

As was the case with the growth in national output, the pace of growth has slowed markedly since the 1960s. The rate declined from 41.7 percent and 36.6 percent a year during the Three-Year Plan and Five-Year Plan, respectively, to 12.8 percent, 16.3 percent, and 12.2 percent, respectively, during the First SevenYear Plan, Six-Year Plan, and Second Seven-Year Plan. As a result of faster growth in industry, that sector's share in total national output increased from 16.8 percent in 1946 to 57.3 percent in 1970. Since the 1970s, industry's share in national output has remained relatively stable. From all indications, the pace of industrialization during the Third Seven-Year Plan up to 1991 is far below the planned rate of 9.6 percent. In 1990 it was estimated that the industrial sector's share of national output was 56 percent.

Industry's share of the combined total of gross agricultural and industrial output climbed from 28 percent in 1946 to well over 90 percent in 1980. Heavy industry received more than 80 percent of the total state investment in industry between 1954 and 1976 (81.1 percent, 82.6 percent, 80 percent, and 83 percent, respectively, during the Three-Year Plan, Five-Year Plan, First Seven-Year Plan, and Six-Year Plan), and was overwhelmingly favored over light industry.

North Korea claims to have fulfilled the Second Seven-Year Plan (1978-84) target of raising the industrial output in 1984 to 120 percent of the 1977 target, equivalent to an average annual growth rate of 12.2 percent. Judging from the production of major commodities that form the greater part of industrial output, however, it is unlikely that this happened. For example, the increase during the 1978-84 plan period for electric power, coal, steel, metal-cutting machines, tractors, passenger cars, chemical fertilizers, chemical fibers, cement, and textiles, respectively, was 78 percent, 50 percent, 85 percent, 67 percent, 50 percent, 20 percent, 56 percent, 80 percent, 78 percent, and 45 percent.

Manufacturing

The machine building industry grew rapidly beginning in the mid-1950s and had become the most important industrial sector by 1960. It supplies machinery needed for domestic industry and agriculture, such as tractors and other farm machinery, as well as an extensive range of military equipment. Production levels since the early 1960s, however, have been disappointing. The output of metal cutting machines reached 30,000 units in 1975, but was far below the planned target of 50,000 units in 1984. Output in 1990 was estimated at 35,000 units. Similarly, the output of tractors in 1984 was estimated to be less than 40,000 units, below the Second Seven-Year Plan target of 45,000 units per year. Annual automobile production in 1990 was estimated at 33,000 units.

The quality of machinery generally is considered below international standards. Some of the largest machinery plants are the Yongsng Machinery Works and the Rakwn Machinery Works. The Taean Heavy Machinery Works, built during the Second Seven-Year Plan (1978-84) with Soviet assistance, is the country's largest machinery plant.

During the Third Seven-Year Plan (1987-93), the government plans to modernize the machinery industry by introducing hightechnology and high-speed precision machines and equipment. For example, it was reported in 1990 that the H ich'n Machine Tool General Works had completed a flexible manufacturing process by introducing robots into the plant's numerically controlled machine tools and that the Ch'ngjin Machine Tool Plant and others were hastening to do the same. The Third Seven-Year Plan calls for an increase of 150 percent in machinery output, slightly higher than the claimed increase of 130 percent during the previous plan.

Utilizing the country's relatively abundant iron ore, the steel industry is a major industrial sector. The Kimch'aek Integrated Iron and Steel Works has surpassed the Hwanghae Iron Works to become the largest steel and iron center. The planned annual production targets for the Second Seven-Year Plan of 6.4 million tons to 7 million tons of pig-iron and granulated iron, 7.4 million tons to 9 million tons of crude steel, and 5.6 million tons to 6 million tons of rolled and structural steel were not met. Estimated output of crude and rolled steel in 1990 was 5.9 million tons and 4 million tons, respectively. Outdated technology, a lack of coking coal, and the low purity of domestic iron ore created serious problems for the iron and steel industry. These difficulties forced the government to scale down the crude steel target by the end of the Third Seven-Year Plan compared with the earlier target of 15 million tons by the end of the 1980s. Completion of the second-stage expansion of Kimch'aek in 1988 reportedly increased the output capacity of the complex to 5 million tons or more per year. New expansion projects completed in 1989 added a 100-ton converter, an oxygen plant, and other production and auxiliary systems.

Capacity expansion projects have been under way at the Ch'ngjin and Ch'llima steel complexes. In October 1989, the Large Size Stamp-Forging Plant of the Ch'llima Steel Complex, with a capacity of 2 million tons a year and equipped with a 100,000-ton press, began operation. An expansion project completed in 1989 at the S ngri General Motor Works quadrupled the production capacity of the heavy duty trucks and plant manufactures.

The French-built Ch'ngnyn Integrated Chemical Works in the Anju District north of P'yongyang is the first petrochemical complex designed to produce ethylene, polyethylene, acrylonitrite, and urea. The nearby refinery at Unggi supplies the necessary crude petroleum. The Eight February Synthetic Fiber Integrated Plant, a large-scale complex, produces chemical fibers and has an annual capacity of 50,000 tons. A synthetic fiber complex in Sunch'n, the country's largest, began operation in 1989 after completing its first stage of construction. When all stages are completed, production capacity is expected to reach 100,000 tons of synthetic fiber, 1 million tons of calcium carbide, 750,000 tons of methanol, 900,000 tons of nitrogen fertilizers, 250,000 tons of caustic soda, 250,000 tons of vinyl chloride, and 400,000 tons of soda ash per year.

Light manufacturing has not kept pace with heavy industry. Since the 1970s, the leadership has begun to admit openly the backwardness of consumer goods in terms of quality and variety. The government's stress on providing adequate consumer goods continues into the early 1990s, but is not backed by any real efforts to divert state investment funds from heavy industrial projects. In his 1992 New Year's address, Kim Il Sung stressed achieving the people's long cherished desire that "all people might equally eat rice and meat soup regularly, wear silk clothes, and live in a house with a tiled roof." However, this was preceded by his exhortation that the most important and urgent tasks for 1992 were increasing the production of electricity and coal, and developing rail transport.

The textile industry, the most important light industrial sector, utilizes primarily locally produced synthetics and petrochemically based fibers, as well as cotton and silk. P'yongyang, the site of the P'yongyang Integrated Textile Mill, is the country's textile capital, but Siniju and Sariwn have been gaining in importance. During the Second Seven-Year Plan (1978-84), output of textile fabrics increased by 78 percent registered an annual growth rate of 8.6 percent, and, according to official claims, achieved the 1984 target of 800 million meters. However, foreign estimates placed textile output in 1990 at only 670 million meters. During the Second Seven-Year Plan, knitted goods, particularly those using domestically produced acrylic fibers, were emphasized. Efforts to expand the production capacity of knitwear continue in the Third Seven-Year Plan (1987- 93). By modernizing existing equipment and installing new spinning and weaving machines, the government plans to increase the annual output of textiles to 1.5 billion meters by 1993. Judging from the 1990 level of output, it is unlikely that this target will be fulfilled.

The Third Seven-Year Plan emphasizes synthetic fiber production based on indigenous technology using coal and limestone, and on the production of chemical fiber based on petrochemistry. The government has called for accelerating the expansion projects at both the Siniju and Ch'ngjin chemical fiber complexes. The planned annual output target for chemical fibers in the Third Seven-Year Plan is 225,000 tons while the output for synthetic resin and plasticizer is targeted at 500,000 tons. Foreign estimates place the output of chemical fibers in 1990 at 177,000 tons. North Korea also has a chemical weapons capability.

Since the early 1960s, local industry has been the major supplier of consumer goods and foodstuffs. With the introduction of the August Third People's Consumer Goods Production Movement, in effect since 1984, the government's policy of developing small- and medium-scale local industrial plants simultaneously with large-scale, centrally controlled light industrial plants continues into the 1990s.

Mining and Metal Processing

The economy depends to a considerable degree on the extraction of its many mineral resources for fuels, industrial raw materials, and metal processing as well as for exports. Anthracite coal, with estimated reserves of 1.8 billion tons, is the most abundant of the country's mineral resources. It is produced in large quantity for both domestic consumption and export. Coal mines, largely concentrated in South P'yngan Province, produced 68 million tons and 22 million tons, respectively, of anthracite and the less abundant lignite coal in 1990. Despite a fairly steady increase in the 1980s, coal production has not been able to catch up with rising demand. This situation has created a persistent energy shortage because the country relies on coal as its main energy source and lacks any reserves of oil or gas.

The lagging coal industry remains a major bottleneck. The aging of existing mining equipment and facilities, the inefficiency that arises from the increasing need to mine deeper seams, and a lack of modern, efficient equipment are the primary reasons for the production lag in extractive industries. The persistence of these problems prompted Kim Il Sung to stress the importance of developing the mining and power industries and rail transport even in his 1992 New Year's address--the same theme he has repeated annually in his New Year's address for at least the previous fifteen years.

Because of the lack of domestic reserves, the country continues to rely on foreign sources for bituminous coal. Toward the end of the 1980s, China was the chief source of coking coal, followed by the Soviet Union.

The Anju District coal mining complex is the leading coal producer. A large-scale open-pit mine was being developed in the Anju District in 1990. High-quality anthracite deposits are located in the Paegam District of Yanggang Province, and have estimated reserves of at least 1 million tons. Coal deposits amounting to 10 million tons also exist in Chunbi, T'- gol, and Kangdong in Kangdong District.

With estimated reserves of 400 million tons, iron ore continues to be important for domestic industry and is a major source of foreign exchange. According to Western estimates, annual iron ore output increased from 8 million tons in 1985 to 10 million tons in 1990. In the 1980s, new mines were added at Tksng and Shae-ri; they supplemented older mines at Musan, nryul, Tkch'n, Chaeryng, and Hasng, all of which received considerable state investment. The expansion projects started in early 1988 to increase the production capacity of the Musan Mining Complex to 10 millions tons per year were completed in 1989. The long-term annual output target, however, is 15 million tons. The Chngp'yng Mine in South Hamgyng Province was commissioned to produce ores in February 1991.

North Korea possesses the largest and some of the best quality magnesite deposits in the world--an estimated 490 million tons. The mining of magnesite is important for the domestic industrial ceramics industry and for exports. Magnesite mines are concentrated in the Tanch'n District in South Hamgyng Province; annual output of magnesite in 1990 was estimated at 1.5 million tons. With the completion of expansion projects of the Tanch'n Magnesia Plant and the construction of the Unsng Crushing and Screening Plant in 1987, the production capacity of magnesia increased to 2 million tons annually. The government also began efforts to expand output capacity of magnesia in the Taehng District toward the end of the 1980s.

Other important minerals are lead, zinc, tungsten, mercury, copper, phosphate, gold, silver, and sulfur; manganese, graphite, apatite, fluorite, barite, limestone, and talc also are found in great supply. Zinc and lead ingots, among the leading exports, are produced at domestic smelting plants in Tanch'n, Namp'o, Haeju, and Munpyng. With a capacity of 15 million tons, the K mdk Mining Complex in South Hamgyng Province is one of the leading producers. An estimated 200,000 tons of high-grade electrolytic zinc and an estimated 80,000 tons of lead were produced in 1990.

A joint venture project to redevelop the Unsan Gold Mine was unveiled in March 1987. The successful reexploitation of the mine, originally opened by a United States firm in 1896, with deposits estimated at more than 1,000 tons, could make it one of the world's major gold mines.

Building materials, such as the cement used in almost every construction project, are manufactured in large as well as smallscale local industrial plants. Annual cement output was estimated at 11.77 million tons and 12.02 millon tons, respectively, in 1989 and 1990.

 
You can read more regarding this subject on the following websites:

Economy of North Korea - Wikipedia
Automotive industry in North Korea - Wikipedia
How the North Korea Economy Works | Investopedia
What are the major industries in North Korea - Answers.com
OEC - North Korea (PRK) Exports, Imports, and Trade Partners


North Korea Country Studies index
Country Studies main page
About
Contact