LG complex inaugurated
LG complex inaugurated
LG Electronics last week inaugurated its mega electronic manufacturing complex in the northern port city of Haiphong, helping to make Vietnam one of the largest electronics export hubs in the world.
The 800,000 square-metre facility will allow LG to produce price-competitive electronic goods, including its globally-sold smartphones and TVs, the company said. It plans to invest $1.5 billion in the complex between now and 2028.
Koh Tae Yeon, director of LG Electronics Vietnam’s Strategy and Investment Division, said this would be LG’s largest facility in Southeast Asia.
The South Korean electronics giant will invest $510 million to develop the first phase of the complex, which will serve both domestic and international markets, during 2013-2017. The second phase, worth $990 million, will be built from 2017 to 2023.
Yeon said the group would transfer more technology to the Vietnamese electronics industry, expecting to raise the localisation rate to 50 per cent in the first phase. After the complex is put into full operation, it will open up a good opportunity for part suppliers in Vietnam to co-operate and meet the group’s demand for support services and components. In the next five years, 70 per cent of the Haiphong-based complex’s products will be exported to 35 countries worldwide.
Last year, Vietnam’s total export value of electronics products reached $24.1 billion, up13.4 per cent year-on-year, according to the General Statistics Office. Electronics exports surpassed agricultural products, footwear and garments, and textile products to rank as the nation’s top export item. With production set to start at LG Electronics’ complex in Haiphong, Vietnam’s electronics exports are likely to soar.
Recently, LG announced its intention to shift its TV production in Thailand to Vietnam for logistical reasons. Reuters quoted Nipon Wongsaengarunsri, marketing director of LG Electronics (Thailand), as saying that LG considered Vietnam as the most worthwhile country to invest in.
The production expansion of LG also reflects the trend of international electronics giants to shift investment expansion plans to Vietnam. During the past seven years, Samsung committed to invest $11.2 billion in Vietnam, making the country its largest production base in the world.
Microsoft is also moving 30 smartphone production lines from four factories in China, Hungary, and Mexico to Vietnam.
And the world’s second largest notebook contract maker Compal is going to resume production in Vietnam after years of closure due to the global economic recession. Early this year Compal announced that it planned to move part of its smartphone production to its Vietnam facility which closed in 2013, due to rising costs in China. The factory is expected to begin mass production around mid-year with a monthly capacity of less than 100,000 unit.
