LG Innotek, the electronic component arm under South Korea’s giant LG, will invest an additional $1 billion in Vietnam’s Haiphong city, doubling its investment in the northern coastal city to $2.05 billion.
Haiphong authorities delivered the adjusted investment certificate to Lg Innotek Vietnam Haiphong Company Limited, the investor of the project, on Monday.
The investment, slated for July 2023-December 2025, is an achievement of Hai Phong authorities’ investment promotion event in Seoul during June 11-14, said Le Trung Kien, head of Hai Phong Economic Zone Authority (HEZA).
LG Innotek’s 17.2-hectare factory in Trang Due Industrial Park entered operation in September 2017, with an initial investment of over $1 billion and about 3,500 staff, for production of camera modules. With the additional investment, LG Innotek will build a new plant for manufacturing and export of camera modules, employing 2,600 people, Kien added.
The company is scheduled to complete the construction of the plant in the second half of 2024 with a target of commercial operations in 2025, according to LG Innotek. Meanwhile, Hai Phong is poised to install substations for the new factory and offer tax incentives.
With LG Innotek’s newly-registered investment capital, registered FDI in Hai Phong reached $1.9 billion in the first six months of this year, meeting 95% of the annual target for 2022.
Previously, the total investment capital that South Korea, the biggest foreign investor in Vietnam, had registered in the country was $82 billion, including $11 billion in Hai Phong, or 14% of the total. LG is the biggest South Korean investor in Hai Phong with $7.24 billion.
Electronics giant LG’s three factories in Vietnam recorded a total net profit of KRW434.51 billion ($328.5 million) in 2022, down 21% year-on-year. Their total sales reached KRW11,504 billion ($8.7 billion), up 16.71%, according to the company's financial statement.
LG Display Vietnam Haiphong Co., Ltd., under LG Display, posted sales of KRW2,672 billion ($2.02 billion) and a net profit of KRW112.2 billion ($84.79 million), up 3.05% and down 58.52% year-on-year, respectively.
LG Electronics Vietnam Hai Phong Co., Ltd., a subsidiary of LG Electronics, reported sales of KRW4,485 billion ($3.39 billion) and a net profit of KRW176.34 billion ($133.3 million), up 8.26% and 48.38%.
LG Innotek Vietnam Hai Phong Co., Ltd., also under LG Electronics, saw sales grow 39.26% year-on-year to KRW4,438 billion ($3.29 billion), but its net profit went down 8.98% to KRW146 billion ($110.4 million).
All the three factories are located in the port city of Hai Phong, a manufacturing hub in northern Vietnam.
LG Display plans to expand its 45-hectare factory in Hai Phong and seeks recruitment support from the Vietnamese labor ministry. Park Young Dall, vice president and head of LG Display's human resource management division, made the proposal to Deputy Minister of Labor, Invalids, and Social Affairs Le Van Thanh at a meeting in February. He added that LG Display would have huge demand for high-quality laborers, especially engineers.
In March, LG Electronics inaugurated a new R&D facility in Hanoi to serve LG’s rapidly growing electric vehicle-related business. The new Hanoi R&D center focuses on software development and inspection of in-vehicle products, including telematics, and audio, video and navigation devices, LG said. They are called in-vehicle infotainment (IVI) systems.