South Korean industrial giant Hyosung Group aims to turn Vietnam into a major manufacturing base to realise its global expansion target.
|Hyosung Group is planning to expand investment in Vietnam to $6 billion |
The group was recently licensed for its polypropylene (PP) production plant and an associated liquefied petroleum gas (LPG) underground storage depot in the southern province of Ba Ria-Vung Tau worth $1.2 billion in total investment value.
The PP plant element of the project is expected to replace Hyosung’s existing PP production line in South Korea.
Dropping anchor in the Vietnamese market in 2007, Hyosung Vietnam Limited has injected $1.5 billion into its spandex yarn and auto tire manufacturing facilities in the country.
The company is currently operating nine plants based in Nhon Trach Industrial Park (IP) in the southern province of Dong Nai.
This year, the company engaged in building a new plant in Tam Thang IP in the central province of Quang Nam, which is specialised in supplying steel cord to feed the global auto tire industry.
These plants have been supplying input materials (steel cord and tire cord) to global brands such as Goodyear, Yokohama, and Michellin, spandex to sportswear manufacturers like Adidas, Nike or Puma, and components for industrial item production such as pumping machines, transformers, ATM machines, and motors.
To deepen roots in Vietnam, Hyosung is showing keen interests in M&A opportunities.
A Hyosung representative said that the Vietnamese government’s intention to divest from state-owned enterprises (SOEs) matches the company’s strategy in Vietnam and they wish to engage in the Vietnamese SOE equitisation process through capital contributions or stake purchases to become a strategic partner.
To deepen roots in Vietnam, Hyosung is showing keen interest in M&A opportunities in Vietnam.
“We do not pose limits to such investments, provided that the Vietnamese partners satisfy our criteria of operational efficiency in their industries. The concrete criteria for M&A deals shall depend on the specific industry as well as our knowledge about the field,” the source said.
In a recent move, Hyosung wanted to invest in power projects in Vietnam, particularly supplying diverse kinds of power transformers that are always in bad need in the Vietnamese market.
Most recently, the company confirmed its commitment to buy the entire 13 million shares, equal a 46.58 per cent stake, that state-owned power authority Electricity of Vietnam owns at Dong Anh Electrical Equipment Corporation (EEMC).
The company expects support from authorised agencies for the deal to take place as soon as possible.
The Ministry of Industry and Trade was reported to have green-lighted EVN’s capital transfer at EEMC and is moving forward with the auction arrangement procedures, which is quite good news for Hyosung in its ambition to become EEMC’s strategic partner.
Hyosung Group chairman Cho Hyun Joon’s visit to Vietnam early this year is part of the company’s commitment to bring its investment to Vietnam to $6 billion, covering the diverse fields of chemicals, heavy industry, and power projects.