Large investments from South Korea, especially in the electronics sector, could be a basis for the two parties to establish a sustainable parts and component manufacturing chain.
|Vietnam and Korea could tighten their ties in parts manufacturing |
The potential synergies were discussed by representatives of authorities and enterprises at a dialogue on mobile phone parts and components organised by the Department of Trade Promotion (Viettrade) under the Ministry of Industry and Trade in collaboration with the Korea Trade-Investment Promotion Agency (KOTRA). The event saw the participation of 50 enterprises from the two parties.
According to Viettrade director Vu Ba Phu, the dialogue aimed to support Korean enterprises which have plans to invest or extend their operations in Vietnam.
“It will also help connect the businesses of the two sides. Via this connection, Vietnam and Korea can establish sustainable manufacturing value chains in the mobile phone sector, promoting the bilateral investment and trading relations,” Phu said.
Phu said Viettrade had been co-operating with KOTRA for numerous years to establish trade activities and connect companies. The two parties together established the Korea Desk to promote these activities.
In the framework of the event, the representative of Samsung Vietnam shared plans to increase the localisation ratio of its production in Vietnam.
Samsung is currently the largest foreign-invested group in the country with the total investment capital of $17.3 billion. It acquired $59 billion in export turnover in 2019. Its facilities generate 130,000 skilled local workers.
Samsung Electronics Vietnam has only five Vietnamese partners in its 60-strong supply chain, and they do simple jobs like packaging and printing. The others are mainly companies from South Korea or other ASEAN countries or joint ventures between Vietnamese and foreign partners.
Regarding Korean investment in general, as of August 20, the total registered capital of enterprises from this country reached $70.4 billion, accounting for 18.5 per cent of total foreign investment in Vietnam.
In 2019 alone, South Korean enterprises invested $7.92 billion in the country, making up 20.8 per cent of the total foreign investment.
There are 8,900 South Korean business operating in Vietnam, generating more than one million labourers and contributing 33 per cent to the country’s export turnover.