Competition is heating up among South Korean companies vying to set up business operations at the Gaesong Industrial Complex in North Korea.

Officials at the Ministry of Finance and Economy said 1,600 companies have expressed intentions to build factories at the so-called first stage complex, which will be completed by 2007 in the industrial park.

Given that the 3.3 million square meter complex can accommodate only 250 factories, the competition ratio for those openings has already surpassed six to one.

South Korea wants to move labor-intensive production lines, such as clothing, textiles, shoemaking and stuffed goods, to the industrial complex in the North's border city of Gaesong.

Hyundai Asan and the Korea Land Corporation, the South Korean operators of the industrial complex, signed a formal land lease agreement with North Korea Tuesday for 18.3 billion won or 16.3 million dollars.