Korean electronics power investment
Korean electronics power investment
More South Korean electronic firms are coming to Vietnam to set up shop, following Samsung and LG Electronics.
Kim Jung In, chairman of Korea Chamber of Commerce and Industry (Korcham) in Vietnam, said he had recently seen a shift in South Korean direct investments in Vietnam from low to high-added value production in the current hi-tech trend.
“Just in the first quarter of this year, South Korean investors disbursed $157 million in Vietnam, of which $138 million was pumped in hi-tech industries,” said In.
“The presence of electronic giants like Samsung and LG is luring hi-tech firms from South Korea to invest more in Vietnam,” he added.
Since 2007, the world’s largest electronic firm Samsung has committed to invest $3.5 billion in Vietnam through the construction of two manufacturing complexes in northern Bac Ninh and Thai Nguyen provinces.
Meanwhile, LG is in negotiation with the Vietnamese government to build a $1.5 billion manufacturing complex in northern Haiphong port city, and the thumbs-up is likely to come soon.
South Korea is now the largest investing country in Vietnam in terms of the registered projects. South Korean investors registered to invest in 3,287 projects in Vietnam by April 20, 2013, according to the Ministry of Planning and Investment’s Foreign Investment Agency. For many years, most South Korea-invested projects in Vietnam were in low value and labour-intensive industries such as garment and textile and footwear.
“In Vietnam, business conditions are becoming disadvantaged for low value and labour-intensive industries. This forces South Korean firms to modify their investment plans here,” said In.
In addition, he added, Vietnam’s existing incentive policies were luring attention of South Korean investors in hi-tech industries.
“Many of them are suppliers of Samsung and LG, so they will follow the increased investment plans of Samsung or LG in Vietnam,” In said.
Crucialtec Vina, a supplier of Samsung, started investing in its first plant in northern Bac Ninh province in 2011 to provide optic-based mobile input devices, as well as other light source devices and solutions, to Samsung in Vietnam. The firm has gained the recognition as a company applying high technologies in production, enabling it to enjoy special tax incentives from the Vietnamese government.
“We are pleased with the incentives for hi-tech investments in Vietnam. At present, we are planning for the second factory in Vietnam,” said Hwang Bok Hyun, a senior officer of Crucialtec Vina.
In said many South Korean companies like Crucialtec Vina contacted Korcham to learn about investment opportunities in Vietnam, and wanted to enjoy incentives offered by the Vietnamese government to hi-tech firms.
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