South Korean investment to flood market in Hanoi

photo source zing.vn

Kim Kyoung Don, senior specialist at the Korea Trade-Investment Promotion Agency (Kotra), said at last week’s investment promotion conference in Hanoi that the capital city was the second largest consumption market within the national economy based on scale and purchasing power.

Don cited a recent report released by the United Nations Conference on Trade and Development which stated that foreign direct investment (FDI) inflows were currently shifting towards Asia and ASEAN, with Vietnam emerging as one of the most attractive destinations. As such, he pointed out, Hanoi would benefit greatly from this trend.

Under the memorandum of understanding signed between the Hanoi Investment, Trade, and Tourism Promotion Centre and Kotra Hanoi at the conference, the two sides agreed to support South Korean companies in their investment promotion programmes, provide them with information about potential projects, and co-operate in organising investment promotion programmes.

Don also said that this move would likely attract South Korean investors to Hanoi who were hoping to benefit from free trade agreements (FTA) and the establishment of the Asean Economic Community (AEC).

At present, around 700 South Korean businesses are investing in Hanoi, of which 30 per cent are operating in construction, 50 per cent are involved in the services and beverage sectors, and 20 per cent in real estate.

“Many leading companies from South Korea, such as Lotte, E-Mart, Samsung, LG Electronics and Posco, have operated in Vietnam successfully for years and are continuing to expand their activities here,” said Park Jung Hwan, co-chairman of the Vietnam-Korea Business Centre.

Specially, Samsung, the largest foreign investor in Vietnam, poured around $12 billion into four projects here. Last year, the South Korean giant earned $26.3 billion in the export turnover in Vietnam, and this figure is projected to hit $32 billion this year. Meanwhile, LG Electronics, the world’s second largest television maker after Samsung, invested $1.5 billion in its largest facility in Southeast Asia at the northern port city of Haiphong’s Trang Due industrial park, which manufactures and assembles hi-tech products for domestic consumption and export, such as TV sets, mobile phones, washing machines, air conditioners, and digital equipment for automobiles.

Hanoi now ranks third among the 63 cities and provinces in terms of FDI attraction. As of July this year, the city licensed more than 3,300 projects, with the total registered investment capital of $26.5 billion.