Vietnam - a big Korean investment venue

Samsung Vietnam illustration photo

LG, one of Korean leading electronic groups, may be honoured an investment certificate this July for its landmark electronic and household appliances manufacturing base to be placed in northern port city Haiphong’s Trang Due Industrial Park (IP).

The project’s total investment would reach $1.5 billion with $300 million earmarked for first phase investment and attract around 20,000 labourers.

“LG’s fresh investment in Haiphong could charm more and more satellite businesses of the group to Vietnam,” said Bui The Long, general director of Saigon-Haiphong IP JSC, the developer of Trang Due IP.

Similarly, after Korean electronic giant Samsung decided to pump $4.5 billion into Vietnam ($2.5 billion in northern Bac Ninh and other $2 billion in northern Thai Nguyen province) throngs of Korean satellite businesses have flocked to Vietnam.

For instance, in late May 2013, Haesung Vina opened its second factory in Vinh Phuc province’s Khai Quang IP. The company specialises in manufacturing cameras for Samsung’s smartphones and with this second factory, its production in Vietnam would jump to 25 million products per year from current 10 million.

In the same period, Keosan Vina Electronics was also licensed to build a $400,000 smartphone devices production facility in northern Bac Giang province.

According to Samsung Complex general director Shim Won Hwan, Samsung’s 54 satellite businesses have settled down in Vietnam with more than $2 billion in total committed capital. This figure would escalate in the coming period after Samsung’s two complexes run stable production, turning out more than 200 million smartphones per year.

Samsung and LG are two among numerous Korean investors in Vietnam. Korean businesses’ success stories in Vietnam also cover other high-profile groups like Hyundai, Kumho Asiana, Lotte and CJ and thousands of Korean smaller firms.

In respect to Korean investment flows to Vietnam, Minister of Planning and Investment Bui Quang Vinh many times praised the big contributions of Korean investors to Vietnam’s socioeconomic development.

Particularly, Korean investors’ quick actions to execute projects made Korea one of most desired foreign partners Vietnamese localities want to team up. 

The Ministry of Planning and Investment’s Foreign Investment Agency (FIA) figures show that as of June 20, 2013 there were 3,352 Korean investment projects in Vietnam valued at $25.5 billion, placing Korea the fourth biggest investor among countries and territories doing business in Vietnam.

It is important to note that Samsung’s $4.5 billion investment was not included in FIA’s above figures since Samsung has been investing in Vietnam mostly through its Singapore-based subsidiaries, so that investment figures were accounted for Singapore but not Korea.

If Samsung’s huge investment was counted, Korea would become the second biggest investor in Vietnam behind Japan.