South Korea visit concludes with wide-ranging agreements

The visit by General Secretary Trong was marked by a wealth of new co-operative deals

The visit saw the signing of four deals including a memorandum of understanding on removing unexploded ordnance in Vietnam, an MoU on defence services, loans for the Vam Cong bridge, and an agreement with South Korea’s Eximbank to provide $12 billion in loans for transport and energy.

Samsung also received a licence from Ho Chi Minh City authorities for construction of a $1.4 billion project to make electronics products in the city.

The Samsung CE Complex will cover 70 hectares in the city’s hi-tech park to produce and research hi-tech electronics products.

Construction will begin in January 2015 and operations will begin in the first quarter of 2016. The project will include the establishment of a research and development centre to support Samsung’s efforts in Vietnam (more coverage on page 4).

VietJet Air also used the visit to announce the opening of its flights from Seoul to Danang and Hanoi and the future operation of its Busan-Hanoi route. It also highlighted the start of flights on the Ho Chi Minh City-Seoul route from 2015.

Trong also met with heads of the Keangnam Group, telling the company’s leadership that Vietnam welcomed investment, especially in infrastructure, human resources, green growth, and support industries. Keangnam currently operates its landmark tower in Hanoi and is also a construction contractor in Vietnam.

At the bilateral talks by Trong and President Park Geun-hye, and his meeting with Prime Minister Chung Hong-Won, the two countries agreed to boost bilateral trade to $70 billion in 2020, up from $27.5 billion last year. To this end, they also agreed to conclude a free trade agreement within this year. The agreement’s seventh round of negotiations was wrapped up last week.

Hong-Won said South Korea regarded Vietnam a key development and investment partner, and that his country would continue its official development assistance (ODA), particularly in energy, infrastructure, science and technology, education and training, and human resource development.

The leaders also agreed to “further expand co-operation in labour, industry, agriculture, finance, and development projects, as well as in large-scale infrastructure construction projects so as to effectively connect the two economies,” said a joint statement released after the talks.

South Korea is Vietnam’s second biggest donor of official development assistance, with a committed $1.2 billion in 2012-2015, up $200 million from 2008-2011.

As of September 20, 2014, South Korea was Vietnam’s second biggest foreign direct investor, with 3,983 inprojects registered at $33.4 billion.

Samsung Electronics, the world’s largest electronics firm, has already committed nearly $10 billion to Vietnam for its facilities in Bac Ninh, Thai Nguyen and Ho Chi Minh City. Other subsidiaries of Samsung Group are researching investment opportunities in the country in the shipbuilding, property and power sectors.

LG has expanded its investment in Vietnam with a new $1.5 billion electric appliance production complex in Haiphong following its plant in Hung Yen.

Posco Group has said it considers Vietnam a key market in the Southeast Asia region. The group is going to inaugurate a $600 million steel factory in Ba Ria-Vung Tau province.

Kumho Asiana, which built a $100 million tyre factory in southern Binh Duong province in 2008, is planning to expand its investment in Vietnam to $300 million. The expansion would increase total capacity to 5.6 million units. Kumho Asiana Group chairman Sam-Koo Park also announced that the group planned to further expand the plant to reach an output of 13 million units.

Doosan is preparing to expand the second phase of its production base in Vietnam, focused on manufacturing nuclear power equipment, a move aimed at better positioning the company as a potential contractor for domestic nuclear power plants.

Lotte Consortium – a joint venture between Korea’s Lotte and Japanese investors – was recently granted in-principle approval to develop the company’s proposed Smart Complex. The $2 billion facility is planned for the 2A area in the Thu Thiem New Urban Area in Ho Chi Minh City’s District 2. Lotte said it envisioned the complex as a landmark of the city and greater Southeast Asia. Early this month, Lotte opened the Lotte Centre Hanoi - a major apartment, office, shopping and entertainment tower.

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