South Korean conglomerateSamsung, one of the largest foreign investors in Vietnam, is looking at extending its footprint in the country with fresh plans to invest in new sectors – insurance and energy.
In 2014, Samsung group’s export value from Vietnam touched $26.3 billion, mostly from the electronics and related sector. This accounts for 17.5 per cent of Vietnam’s total export turnover. The group’s has already invested over $13 billion across different projects in Vietnam.
The Korean group’s decision to look at investing in other sectors in Vietnam emerged following a meeting between the Vietnam Ministry of Communications and Samsung Vietnam officials.
“Following the success of Samsung Electronics in Vietnam, other units of the group are keen on expanding their operations in the country. These include the energy and insurance industries and they are studying to kick off investments,” Samsung Vietnam general director Han Myoung Sup said in a statement.
Samsung, South Korea’s leading chaebol (local word for conglomerate), engages in the insurance industry through itsSamsung Life andSamsung Fire and Marine Insurance units. The electronics giant is present in the energy and oil and gas sectors through its arms,Samsung Renewable Energy,Samsung Engineering andSamsung C&T.
Elaborating on Samsung’s electronics operation in Vietnam, Han said, the employee strength in its factories based in two northern provinces (Bac Ninh and Thai Nguyen) has reached over 110,000.
Samsung is also looking at increasing its Hanoi R&D centre engineering cadre strength to 5,000, an over three-fold increase from the current head count of 1,400. The investment in R&D from Samsung will not only serve its own benefits but will also contribute to the advancement of the quality of technology human resource in Vietnam, said the minister of communications Nguyen Bac Son.
“Samsung’s R&D centre is an example to show other multinational investors that investment in R&D is a must-have element to grow sustainably,” Son said.
Samsung’s investment in factories located in the northern provinces amount to $7 billion. It will spend another $3 billion on expanding its Samsung display plant in Bac Ninh, which was initially invested with $1 billion in 2014. A ground-breaking ceremony has also been launched for a Samsung electric appliance production complex worth $1.4 billion in Ho Chi Minh City.
“Vietnam has become Samsung’s largest overseas production hub. Its investment projects in the country are over $13 billion,” Dang Xuan Quang, deputy director of the Foreign Investment Agency under the Ministry of Planning and Investment reportedly spoke at a recent seminar on the local supply chain, co-hosted by Samsung and the Vietnam Association of Foreign Invested Enterprises.
Also addressing the seminar, Han reportedly expressed his ambition that Samsung will be known not only as Vietnam’s largest investor or the biggest exporter in Vietnam, but also be seen as “Vietnam’s national enterprise”.
The total investment from Korea into Vietnam has reached $39.16 billion, reinforcing Korea’s number one position as an overseas investor in the Southeast Asian country. With the Vietnam Korea Free Trade Agreement signed in May, the economic ties between the two nations is anticipated to be enhanced, with trade turnover expected to touch $70 billion by 2020.
Source: http://www.dealstreetasia.com/ - Bich Ngoc
Key words: Samsung, keen on, bigger play in Vietnam, mulls investments, energy and insurance sectors
