A number of modern food factories newly built in Pyongyang under Kim Jong Un’s orders are experiencing financial difficulty as a result of low domestic demand. Collaborative efforts between entrepreneurs and the state appear to have overlooked the fact that Pyongyang citizens generally show a stronger preference for imported snacks.
“(Kim Jong Un) has been emphasizing improvements in living standards for citizens living in the capital. Accordingly, about eight food factories were built in Pyongyang over the past few years, producing various foodstuffs including confectionery, bread, and chocolate. The factories have had no major production issues as they import the raw materials from China. But they’re struggling with poor sales,” a source in South Pyongan Province told Daily NK on January 10.
Following Kim Jong Un’s orders to improve the quality of food available, Pyongyang’s administrative bodies (namely the municipal People’s Committee), approved factory construction plans submitted by the donjuLiterally "masters of money," donju refers to people who hav... More (newly affluent middle class). The authorities required applicants to provide materials for national holiday ceremonies including the birthdays of Kim Il Sung and Kim Jong Il, as well as to nurseries and kindergartens. A number of donjuLiterally "masters of money," donju refers to people who hav... More, assuming reasonable profits, launched headfirst into the partnerships.
Some of these food factories in Pyongyang’s Mangyongdae District, including the KumCup Food Factory, are producing candies, snacks, ham, sundae (a type of Korean blood sausage), and beer. Additionally, a large corn-processing plant in the capital’s Rakrang District manufactures corn snacks and noodles, while the Unhadaesong Food Factory in the Potong River area is said to be producing over a hundred snack variants.
However, the donjuLiterally "masters of money," donju refers to people who hav... More appear to have overestimated market demand and underestimated the demands that the state would make. The North Korean authorities began to actively intervene in factory operations by limiting sales in the market, prioritizing the state’s provision of food to Pyongyang’s citizens, athletes, and childcare facilities.
“(The authorities) have banned sales to regions other than Pyongyang, and prevented export as well. As the number of food factories has increased, the local market has become saturated, and inevitably the factory owners have had problems,” the source noted.
“If Kim Jong Un abandons the policy of restriction and permits international exports as well as sales in other provinces, it would also benefit Pyongyang,” she asserted, “but he is only interested in gift politics, leaving the economy lagging behind.”
The fact that the wealthy in Pyongyang do not think highly of domestically-manufactured food is also problematic for the factory owners.
“Those who have money to spend and are familiar with capitalism do not care much for domestic brands, claiming they are generally inferior in quality. Also, high-ranking cadres receive their consumables from the Yongsong Special Food Factory, which makes it even more difficult to increase sales,” a source in Pyongyang explained.
“Ordinary residents will eat domestically-produced snacks as part of the special holiday provisions of course, but people don’t typically seek them out. Pyongyang foodstuffs sometimes enter border regions including North Hamgyong Province, but they are still relatively unpopular compared to snacks from China or South Korea imported through trade and smuggling.”
