The first South Korean firm on Monday shut up shop at the Kaesong Industrial Complex at a time of crisis for the inter-Korean project after exorbitant demands by North Korea for more money.

Apparel maker Skinnet began removing equipment which North Korean employees had used at the industrial park to its plant in Paju, Gyeonggi Province, 15 km across the military demarcation line. All South Korean staff will leave the industrial park on Wednesday after the company pays North Korean staff US$9,400 for June and $6,700 severance.

Skinnet's president said, "We had intended to continue operation of our plant at Kaesong until the end of this month, but we decided to withdraw earlier because the future of inter-Korean relations is uncertain."

Trucks carrying equipment belonging to Skinnet, the first South Korean company to pull out of the Kaesong Industrial Complex in North Korea, pass a South Korean border checkpoint on Monday.

Other South Korean firms at the industrial park seem set to follow suit. About 120 South Korean businesspeople involved in trade and processing-on-demand business in inland North Korea met at the Korea Press Center in Seoul on Monday, urging the government to come up with countermeasures to solve the crisis.

Except the 106 South Korean firms at the Kaesong industrial park, a total of 611 South Korean businesses -- 164 processing-on-demand service companies, 399 general trading companies, and 48 investment companies -- are active throughout North Korea.

With inter-Korean business projects in crisis, South Korea's hopes to improve political relations through economic cooperation seem to have been dashed.

"The government has failed to provide guarantees for free activities of businesses because it hastily pushed for economic cooperation with North Korea in the name of improving the inter-Korean relations," said Cho Myung-chul of the Korea Institute for International Economic Policy. "If inter-Korean economic cooperation is implemented blindly, we'll inevitably see more cases like the Kaesong industrial park project in the future."