S Korean chaebol Hyosung to invest hundreds of millions of USD more in Vietnam’s central hub

HS Hyosung Quang Nam Co., Ltd., a subsidiary of South Korea’s HS Hyosung, is considering investment plans worth hundreds of millions of USD in production of industrial yarn and automotive interior materials in the central city of Danang. The Investor talks with CEO Park Jung-kon about the detailed plans.

How do you assess the current investment environment in Danang after the merger of the city and its neighboring Quang Nam province?

Following the merger, the development space of Danang has greatly expanded, creating significant potential for socio-economic development. We believe the city currently possesses many unique factors that will attract investment in the coming years.

Compared to other localities, Danang has a relatively comprehensive and well-developed transportation system. It has two deep-water ports and two airports at either end of the city, while the North-South and East-West highway corridors are fully built, facilitating inter-regional connectivity. The city government has also been empowered to carry out stronger reforms to enhance investment attraction.

Additionally, Danang has a very dynamic government and is strong in technology and digital transformation - a crucial factor that significantly influences the city’s administrative and governance outcomes.

As a major South Korean investor in Danang, can you share your business results and upcoming plans?

In 2018, we signed an MoU with former Quang Nam province, committing to invest $1.3 billion on a 100-hectare site at the Tam Thang Industrial Park and the Expanded Tam Thang Industrial Park, focusing on producing components for the automotive supporting industry.

By 2019, Hyosung had launched a tire cord fabric production project, and in 2021, a cushion airbag fabric factory was established on a 19-hectare site in the Tam Thang Industrial Park.

So far, the company has received investment certificates for these two projects, totaling over $470 million, creating direct jobs for over 1,000 people and thousands of indirect jobs through local contractors.

In 2025, we are preparing to sign a lease contract for an additional 20 hectares to expand tire cord production in the Expanded Tam Thang Industrial Park, which had been designated by former Quang Nam province for HS Hyosung projects.

In addition, we are considering a separate investment plan worth hundreds of millions of USD in industrial yarn and automotive interior materials, with a decision expected in the near future.

What difficulties has the company faced while investing in Danang?

When carrying out investment activities in Vietnam in general and in Danang in particular, we have received a great deal of enthusiastic and prompt support from both the central and city governments, which has helped our operations proceed relatively smoothly.

However, there are still several challenges that need to be addressed. One of them is the slow progress in land compensation and site clearance, which delays the creation of clean land for industrial development.

For example, in 2022, we promoted a $180 million steel cord factory project on a 20-hectare site in the Expanded Tam Thang Industrial Park, after receiving in-principle approval from the Prime Minister.

However, due to prolonged difficulties in site clearance and a lack of available clean land, we were forced to cancel this investment project in 2024 after waiting for two years.

Another issue is the slow and unpredictable issuance of land rental pricing, with sharp price increases once announced. This reduces investment attractiveness and significantly impacts our investment planning, especially for foreign direct investment (FDI) enterprises like us.

Furthermore, the restructuring of government agencies and the merging of administrative units has caused disruptions in handling administrative procedures.

What sectors are South Korean investors interested in, and what should Danang do to enhance investment attraction?

With the orientation to become a new center for science and technology, a hub for digital industry, finance, semiconductors, pharmaceutical production and processing, and high-quality tourism and services, Danang offers many areas of interest to South Korean businesses.

We believe that digital technology, artificial intelligence (AI), and manufacturing industries are the top fields that Korean companies focus on, given our strong expertise in management, research, and production capabilities in these areas.

To further attract investment from South Korean firms in particular and FDI enterprises in general, the city needs to further reform administrative procedures, especially in the fields of land, investment, and construction, by simplifying processes and delegating authority to local units.

There is also a need to accelerate land compensation, and to formulate and publish land rental prices in a timely and reasonable manner. Investment in inter-regional transportation infrastructure should be prioritized to enhance traffic flow and reduce logistics costs.

We hope and trust that Danang will continue to implement stronger reforms to promote socio-economic development and contribute to Vietnam’s overall growth goals.