Samsung on way to upping investment

October 08, 2012 | 13:57

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Samsung is taking some big administrative steps to muscle up its investments in Vietnam by the tune of $830 million.

Samsung Electronics Vietnam and Bac Ninh Provincial People’s Committee started administrative procedures to push forward the investment plan following the Vietnamese government approving incentives for the giant mobile phone maker.

The provincial committee last week asked Bac Ninh Provincial Industrial Parks Management Authority, the province’s Department of Planning and Investment and other related authorities to guide Samsung Electronics Vietnam to make an application for the new investment project, which is actually the expansion of its existing $670 million mobile manufacturing facility. The facility started operating in 2009.

Last month, the Vietnamese government agreed to grant the highest incentives to meet Samsung’s precondition for increased investment in Vietnam. “This is a big project so that we would like it to take shape as soon as possible. All the administrative procedures will be completed in a short time,” said a Bac Ninh Provincial Industrial Parks Management Authority official.

According to Vietnam’s Enterprise Law, an investment expansion project will not be granted incentives like a newly established one. “Therefore, Samsung must establish a new project and then merge it with the existing one “immediately,” said the official.

Samsung’s expansion will raise its total registered investment capital in Vietnam to $1.5 billion, making Vietnam among the South Korean firm’s largest manufacturing bases. Currently, the Bac Ninh facility produces all Samsung latest hi-tech products like Galaxy S III, Galaxy Tab 7 and Galaxy Tab 10, serving Asian and European markets. Samsung expected to reach $16 billion in export revenues by 2015 in Vietnam.

According to Bac Ninh Provincial People’s Committee, the facility would reach an annual total capacity of 100 million units at the end this year, creating jobs for 23,000 people. By May 2012, Samsung had 53 suppliers operating in Vietnam and this number is estimated to reach 200 by 2015.

The local government expected Samsung’s $1.5 billion manufacturing complex to attract about 300 suppliers to build new factories in Vietnam with total investment commitment of $1-$1.2 billion. These suppliers will generate about 100,000 jobs.