Korean chaebol Hyosung faces hurdles with $1.34 bln central Vietnam investments

South Korean conglomerate Hyosung has reported several difficulties related to land allocation for its projects and compensation for residents as it implements investments worth $1.34 billion in Quang Nam province.

Its Vietnam subsidiary, Hyosung Quang Nam Co., Ltd., has asked local authorities to help remove obstacles that it is encountering in the province.

In October 2018, Hyosung signed an MoU with the provincial People's Committee on investing $1.34 billion in several projects on a 100-hectare site.

The chaebol received its business license in September 2018, began constructing a factory in January 2019, and has begun production.

It has disbursed $245 million for this 18-hectare project which produces tarpaulin and airbags, employing about 1,000 workers.

The Korean chaebol said that it has been continuously increasing its investments in the province towards fulfilling the commitment it made in 2018.

In April 2022, the company received a license to increase its investment in the tarpaulin production plant to $410 million. This adjustment also increased the current factory area by 21 hectares to 34.67 hectares.

Construction in this phase was scheduled to begin in August 2022; machinery installation and testing in February 2023; and official operation to begin in Q4/2024.

However, several problems have surfaced. For instance, reports on new business sectors for investment attraction, land allocation requests, and issuance of specific land rentals for the expanded Tam Thang Industrial Zone are still pending.

The compensation process is also facing many obstacles related to public land (5%) and compensation for residents who farmed on the land but do not meet eligibility conditions.

These have led to difficulties in signing land lease contracts and completing other legal procedures, significantly impacting the investment timeline for Hyosung in Quang Nam.

In addition to expanding the tarpaulin manufacturing plant, the group plans to invest in an 8-10 hectare factory making interior decorations with a total investment of $110 million. Work on the factory is slated to begin in Q2/2025.

Provincial Vice Chairman Phan Thai Binh has asked the Quang Nam Economic and Industrial Zones Authority, the provincial Department of Natural Resources and Environment, the Tax Department, and Chu Lai Industrial Zone Infrastructure Development Co., Ltd. (CIZIDCO) – infrastructure developer for the expanded Tam Thang Industrial Zone – to take urgent measures to remove difficulties the Korean group has encountered.

Hyosung is one of South Korea's leading multinational corporations, with annual global revenues exceeding $8.7 billion. It operates across seven sectors: textiles, industrial materials, chemicals, electrical systems and industries, construction, trade, and information and communication technology. It boasts a network of over 73 subsidiaries, and offices and branches worldwide.