The joint Kaesong Industrial Complex was not included on the South Korean government's list of sanctions against North Korea over the sinking of the Navy corvette Cheonan but is in fact seriously affected.
Firms operating at the industrial park are expected to suffer as a result of the government's decision to reduce South Korean staff there by half. CEOs say if the situation continues production will be affected and orders will dwindle.
The Unification Ministry on Monday wrote to businesses operating in the industrial park advising them how many staff can stay there and telling them to send all surplus staff back to South Korea by Thursday.
The ministry decided to cut staff by 50 to 60 percent of the 900-1,000 South Koreans who work there on weekdays.
None of the 204 South Koreans with permits to stay at the industrial park for extended periods were allowed to travel there on Tuesday, while some 401 South Koreans were allowed to go to the border town for the day only. But only 235 went to work and many have given up. North Korean officials did not put any special restrictions on travel of South Korean staffers and transport of raw and subsidiary materials to and from the industrial park on Monday and Tuesday.