Home Property Posts Nikkei: Samsung, SK Group … and large Korean corporations increased their investment in Vietnam amid the sluggish domestic economy

Nikkei: Samsung, SK Group … and large Korean corporations increased their investment in Vietnam amid the sluggish domestic economy

by Steve Ninh
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Vietnam is South Korea’s third largest export market, after China and the United States. It is expected that Vietnam can surpass the United States by 2020. Retailers selling Korean food and other products are also developing in Vietnam, because there are more than 200,000 Koreans living and working here.
Nikkei reported that Samsung Electronics and other Korean companies are increasing their investment in Vietnam amid a slowing of exports due to trade tensions between the US and China.

Samsung recently announced it would spend $ 220 million to build a research and development center in Hanoi, scheduled to open in 2022. Meanwhile, SK Group decided to invest in Vingroup – Vietnam’s largest corporation, to cooperate in the field of automobile manufacturing and other businesses.
Korean companies’ direct investment in Vietnam increased by 10% in 2019 compared to the same period last year, to 7.9 billion USD. Investment from Korea accounts for 20% of total foreign direct investment into Vietnam and in 2019.

Samsung will conduct research on the production of smartphones and other information technology products at its R&D center as planned. The new center will employ 3,000 local engineers and become one of Samsung’s main R&D facilities.
Samsung SDS, a system developer of the South Korean tech group, bought a 30% stake in CMC Corp, the second largest information technology company in Vietnam, for more than 4 billion yen in July. last.
Samsung Electronics has started manufacturing mobile phones in Bac Ninh since 2009, paving the way for other Samsung Group companies to enter Vietnam. Samsung is said to be producing half of the smartphones shipped globally at two factories in Vietnam.
In May 2019, SK Group announced it would buy a 6.1% stake in Vingroup for $ 1 billion. SK Group sees an opportunity of open cooperation with this Vietnamese corporation. Vingroup is shifting its focus to the automotive industry, smartphones and other manufacturing operations, analysts said.
Among Korean companies not operating in manufacturing, KEB Hana Bank signed an agreement in July last year to buy a 15% stake in Bank for Investment and Development of Vietnam (BIDV).
KEB Hana Bank – Korea’s leading commercial bank, operating mainly with Korean companies operating in Vietnam, wants to expand its customer base to local companies through its spending network. BIDV branch.
Exports to China, accounting for a quarter of Korea’s total exports, were down 16% in 2019 from the previous year. In addition, Korea’s trade with Japan is also not going smoothly. A boycott of Korean consumers on Japanese products broke out after Japan imposed export restrictions on South Korea last July. On the other hand, Korean airlines have continuously cut flights to Japan.
Korean companies are looking for business opportunities in Vietnam, at a time when their country’s economy is stagnant. Vietnam is South Korea’s third largest export market, after China and the United States. It is expected that Vietnam can surpass the United States by 2020. Retailers selling Korean food and other products are also developing in Vietnam, because there are more than 200,000 Koreans living. and work here.

Investment in Vietnam increased by 7.2% in 2019 from the previous year to US $ 38 billion, with Hong Kong and South Korea the two largest investors. Singapore came in third, Japan fourth and China fifth.
Amidst the trade war of the world’s two largest economies, FDI from China to Vietnam increased by 65% ​​to US $ 4 billion in 2019 due to a doubling in new investment due to the production of foreign manufacturers. Chinese production moved to this country.

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