Vietnam’s importance as a highly favoured investment destination for leading South Korean companies is reflected in the strong business delegation accompanying President Yoon Suk Yeol, officials say.
The heads of 205 leading businesses in Yoon’s entourage are seeking new investment opportunities in the country, they add.
President Yoon began a three-day official visit to Vietnam Thursday.
"Last year, Vietnam emerged as South Korea's third-largest trade partner following China and the U.S.," Choi Sang Mok, Korea’s senior presidential secretary for economic affairs, said at a press briefing in Seoul last week before Yoon’s departure for official visits to France and Vietnam.
Electronics giant Samsung had announced early last December its plans to increase its investment in Vietnam from $18 billion to $20 billion. Later the same month, Samsung Electronics executive chairman Lee Jae Yong launched the South Korean giant’s new $220 million R&D center in Hanoi in late December.
Lee is part of the business delegation accompanying the South Korean president.
More than half of Samsung smartphones are currently made in Vietnam, recognized as one of the world’s fastest-growing economies. Samsung Electronics currently operates four manufacturing companies in Vietnam, together with a sales entity. The giant’s subsidiaries make flagship phones, home appliances, communications equipment, displays, camera modules and other products. A Samsung Vietnam R&D team was formed in 2012.
Other leading lights in the business delegation include SK Group chairman Chey Tae Won, LG Group chairman Koo Kwang Mo and Hyundai Motor Group executive chairman Chung Euisun.
South Korea’s second-largest conglomerate, the SK Group with large operating companies in semiconductors, telecommunications, energy and life sciences, has already established a significant presence in Vietnam.
Last week, the group’s SKC Co. signed a preliminary agreement with Hai Phong city to explore potential investments in advanced materials for semiconductors, secondary batteries, and other green sectors. SKC said it was considering Hai Phong, a major port city and logistics hub in the north, as a site for its expansion into high-tech materials.
The SK Group is already a big investor in Vietnam. It established the SK Southeast Asia Investment Corp. in 2018 in Singapore to invest in promising Vietnamese companies. The same year, it purchased a 9.5% stake in leading multi-business corporation Masan Group for $470 million. In 2019, it announced a $1 billion investment in Vingroup, Vietnam’s largest private conglomerate.
Meanwhile, LG Display Co. announced last June that it was raising $1 billion in new funding from global banks to expand its organic light-emitting diode module line and build up infrastructure at its Vietnam display plant in the northern port city of Hai Phong. It said the funds would be sourced from ANZ, HSBC, Citibank and Spain’s Caixa Bank, with guarantees from the Export-Import Bank of Korea and the Korea Trade Insurance Corp, shortly known as K-Sure.
The LG Group began its Vietnam investment journey in 1995 and has built production sites in Hai Phong (its strategic spot in the country) and Hung Yen province, also in the north. LG Electronics Vietnam Hai Phong focuses on electronics while LG Innotek Vietnam Hai Phong and LG Chem Vietnam supply electronic components. LG Display Vietnam Hai Phong manufactures LCD and OLED displays.
The group said last December that it plans to channel another $4 billion into Vietnam. At the end of last year, its investments in the country stood at about $5.3 billion.
The Hyundai Motor Group has been a leader in the Vietnamese auto market with two popular brands - Hyundai and Kia.
Kia started its manufacturing unit in Vietnam in 2004, collaborating with Vietnamese carmaker Thaco. The Thaco Kia manufacturing facility is located in Thaco Chu Lai, a complex of auto assembly, car parts and engineering factories in the central province of Quang Nam.
In 2017, the group established Hyundai Thanh Cong Motor Vietnam as a joint venture with another Vietnamese group, Thanh Cong, launching their first plant in the northern province of Ninh Binh. The company inaugurated its second facility in the province last November.
The group has unveiled plans to solidify their lead in the rapidly growing Vietnamese auto market through the release of new models and sales of popular vehicles, the Korea Times reported Wednesday. Accordingly, it will start local production of the IONIQ 5 in July to expand its presence in the Vietnamese electric vehicle market, competing with Vietnamese EV maker VinFast of the SK Group-backed Vingroup.
On Thursday, President Yoon visited a Hanoi trade fair promoting South Korean businesses and helping entrepreneurs from both countries make inroads into each other's markets.
The fair included a K-Industry Showcase offering first hand introductions to goods and services made by Korean firms, a trade consultation program matching South Korean businesses with potential Vietnamese buyers and a "grand challenge" event identifying Southeast Asian startups wishing to launch businesses in South Korea.
Yoon is also set to take part in the Vietnam-Korea Business Forum held Saturday in Hanoi as part of sustained efforts to further expand bilateral economic ties.
At an export event in Hanoi Thursday, Korean companies discussed potential business deals with a combined value of up to $100 million with Vietnamese counterparts.
South Korea’s Ministry of Trade, Industry and Energy said that around 100 South Korean firms discussed potential business ties with 200 Vietnamese companies in several sectors, including smart farming and biotechnology. As many as 400 meetings were held at the event hosted by the state-run Korea Trade-Investment Promotion Agency.
The ministry said that the anticipated scale of deals implemented within a year has been estimated at $40 million. A separate event was organized at the venue to introduce South Korea's latest technologies, with participants including executives of Samsung Electronics, SK Group and the Hyundai Motor Company.