According to Yonhap News,

(SEOUL = Yonhap News) A business lobby group for small- and mid-sized enterprises (SMEs) said Tuesday it will seek to build another industrial complex in North Korea like the one in the border city of Kaesong, on the condition that inter-Korean ties improve.

"We have heard second hand from the North side that the country wants to build a second Kaesong industrial complex in its free economic zones of Rajin and Sonbong," Kim Ki-mun, chairman of the Korea Federation of Small and Medium-sized Businesses, said in a meeting with reporters.

Kim made clear that the association is pushing for the plan without prior government approval.

Rajin and Sunbong are located in the North's northeastern coast near the Russian border. They were designated "free economic zones" in 1991 to lure foreign investment.

The Kaesong industrial complex was born out of an agreement from the first-ever inter-Korean summit in 2000 and began operations in 2004. The complex now hosts some 120 South Korean companies that employ more than 44,600 North Korean workers.

Kim said the association is looking at the western coastal cities of Haeju and Nampo as potential sites for the second complex since they are close to Kaesong and can provide the labor force more readily.

The lobby group reportedly conducted a feasibility study recently on the Rajin-Sunbong region and concluded that the cities do not provide suitable facilities for generating electricity and logistics.

"Haeju and Nampo would be a one and a half-hour or two-hour drive from Kaesong if a road is built, and they can supply the electricity generated in Kaesong as well as an abundant labor pool," Kim said.

The negative side is that the cities are near Pyongyang and military facilities, Kim said.

He stressed that any proposal on the project is dependent on better inter-Korean ties and trust-building.

Kim said the association will lay the basis for South Korean companies operating in Kaesong to be able to export their products. It will also seek to have products made at the complex be recognized as made in South Korea so that they can be better received in foreign markets, he said.