Republic of Korea increases investment in Vietnam

06:00 | 02/11/2021 Economy

(VEN) - LG Display Vietnam recently invested an additional US$1.4 billion in its factory in the city of Hai Phong, resulting in a strong increase of foreign direct investment (FDI) by the Republic of Korea (RoK) in Vietnam. The RoK has surpassed Japan to rank second, behind Singapore, among 94 countries and territories investing in Vietnam in the first nine months of 2021.

republic of korea increases investment in vietnam
RoK investors consider Vietnam an attractive destination

US$3.9 billion in nine months

According to the Ministry of Planning and Investment’s Foreign Investment Agency, in the first nine months of this year, RoK firms invested US$3.9 billion in Vietnam, a year-on-year increase of 23.4 percent. RoK investment accounted for 17.7 percent of total FDI in Vietnam during this period.

On August 30, LG Display Vietnam increased investment in its factory in Hai Phong, by US$1.4 billion for the second time in 2021. In February, it invested US$750 million, bringing the group’s 2021 total additional investment to US$2.15 billion.

According to the Foreign Investment Agency, compared with other foreign investors, RoK firms showed the greatest interest in investing in new projects as well as in expanding operations in Vietnam. This reflects RoK investors’ trust in Vietnam’s investment environment in the context of Covid-19.

At a recent seminar themed “Covid-19 and FDI: Impacts and Prospects”, Samsung Vietnam General Director Choi Joo Ho said that Samsung began investing in Vietnam in 2008 and currently has six manufacturing facilities in the two northern provinces of Bac Ninh, Thai Nguyen, and in Ho Chi Minh City, plus a research and development (R&D) center in Hanoi, and a corporate body responsible for Samsung’s sales and marketing activities in Vietnam. So far, Samsung has invested US$17.7 billion in Vietnam.

republic of korea increases investment in vietnam

Enhancing Vietnam’s IT potential

With 50 percent of the construction work completed, Samsung’s R&D center in Hanoi with total investment of US$220 million is scheduled to be inaugurated in late 2022. The center will conduct research on artificial intelligence, 5G, big data and the internet of things. In the long term, the center is expected to contribute to enhancing Vietnam’s information technology capability as well as Vietnam’s competitiveness in the fourth industrial revolution.

From his positive viewpoint on the investment environment in Vietnam, Choi Joo Ho said that despite the fourth wave of Covid-19 that broke out in late April 2021, Samsung Vietnam achieved its export target for the first half of the year. He predicted that if its home appliance manufacturing factory in Ho Chi Minh City resumes operations soon, Samsung will be able to achieve its annual export target.

Hong Sun, Vice Chair of the Korean Chamber of Business in Vietnam, said that many RoK companies have displayed a positive outlook regarding the investment environment in Vietnam and a willingness to continue investing in Vietnam in the future, as well as to consider multi-billion dollar projects.

According to Do Nhat Hoang, Director of the Foreign Investment Agency, Vietnam welcomes RoK projects, especially those in the field of high technology. The free trade agreement signed in 2015 between the two countries allows RoK investment in all fields not forbidden by law and is expected to help Vietnam attract more FDI from the RoK in the coming time.

With an abundant workforce, political stability, social security and preferential policies, Vietnam will remain an attractive destination for foreign investors in general, and those from the RoK in particular.

Nguyen Hoa