South Korean textile companies are once again showing keen interest in setting up processing facilities in North Korea.

According to industry sources, Cheil Textile, which established the first- ever fabric processing plant in North Korea in 1992, is to strengthen its business activities there, hoping to break the $10m for exports this year.

At the same time, Songdo, which produces the 'Tom Kid' brand of children's wear, is reportedly considering opening up its own fabric processing facility in the North in collaboration with a local firm.

Said one Cheil official: "The quality of products made in North Korea is relatively superior to those from China and Southeast Asia and the production cost is about 20 per cent lower."