The South Korean investment landscape in Vietnam is brightening up, following new investments worth billions of dollars, with SK and Hanwha pouring a great deal into their projects.
|Manufacturing is by far one of the most attractive industries for South Korean investors in Vietnam. Photo: Duc Thanh |
SK Group will lead a South Korean business delegation, including all leading companies in various sectors looking to invest and expand, to Vietnam next month. Senior managers of SK Group, the third-largest conglomerate in South Korea, will visit leading counterparts in Vietnam such as Vingroup and Masan Group to discuss the expansion and development of investment plans in more promising fields like ICT, bio-healthcare, energy, and the environment.
“Seeing the potential of Vietnam for upcoming investment and cooperation plans, SK Group will strengthen direct investment projects, in addition to acquisitions and indirect investments already carried out,” an expert from the Korea Chamber of Commerce and Industry (KCCI) in Vietnam told VIR.
In early April, SK acquired 16.26 per cent in VinCommerce, one of Masan Group’s subsidiaries, for a cash consideration of $410 million.
Two years ago, SK Group carried out indirect investment into VinCommerce via a 6.1 per cent stake of Vingroup, owner at the time, valued at $1 billion. It also took 9.5 per cent stake in Masan Group valued at $470 million, as well as around $29 million for a 24.9 per cent stake in local pharmaceutical firm Imexpharm. Total investment of SK Group in Vietnam is estimated at $2 billion.
Moreover, SK Group worked out a deal with Petrolimex, poured money into the Long Son petrochemical project in the southern province of Ba Ria-Vung Tau, provided telecoms solutions for MobiFone, and invested millions of US dollars to develop innovation activities in Vietnam.
Also strengthening its footprint in the country, senior leaders of Hanwha Energy will arrive in Vietnam to discuss and sign cooperation agreements of investments valued at $500 million and $300 million. The investor also would like to accelerate the Hai Lang liquefied natural gas project in the central province of Quang Tri, developed in collaboration with local partner T&T Group and other South Korean groups with investment sitting at $2 billion.
Additionally, real estate and infrastructure are also promising lands for South Korean investors. Land & Housing Corporation, along with Korea Overseas Infrastructure & Urban Development Corporation, will arrive in the country to push forward a $1.5-billion Vietnam-South Korea Industrial Zone project in the northern province of Hung Yen and consider other real estate projects nearby; while Almus – a tier-1 supplier for tech giant Samsung – is looking for the chance to develop an additional factory valued at tens of millions of dollars.
“This is not the first special visit of foreign investors into Vietnam over the last year. These visits carry numerous hopes, plans, and billion-dollar contracts for Vietnam despite travel interruptions hit by the pandemic, and they reflect the attraction of Vietnam for foreign investors and South Korean ones in particular,” the KCCI expert said.
Meanwhile, chairman of the Korea Chamber of Business in Vietnam Kim Heung-Soo said that the efforts of the Vietnamese government in fighting against the pandemic, as well as improving the investment and business climate, have been highlighted by South Korean investors.
“Manufacturing will be the most attractive industry for South Korean businesses to invest in Vietnam. If manufacturing gains more priority than the services sector, it will significantly contribute to accelerating the speed and quality of the country’s growth, as well as lure more foreign investors into Vietnam,” Soo said.
Accumulating to the end of March, South Korea is the top investor in Vietnam with over 9,000 valid projects registered at $71.5 billion, making up 18.2 per cent of total foreign direct investment into Vietnam. In the first quarter alone, South Korea ranked third following Singapore and Japan of leading foreign investors in Vietnam, with nearly $1.2 billion into 324 projects and other deals.