Samsung to boost investment in Vietnam
음성듣기
Conglomerate heir meets with top Vietnamese officials
By Kim Yoo-chul
Samsung heir-apparent Lee Jae-yong met with a delegation of high-ranking Vietnamese officials led by General Secretary of the Communist Party of Vietnam (CPV) Nguyen Phu Trong, late Wednesday, as the company seeks to expand its partnership with the Southeast Asian country.
"Samsung Electronics Vice Chairman Lee Jae-yong discussed pending issues with the CPV leader at our main office in Seocho, southern Seoul, Wednesday," Lee Joon, chief communications officer at the Samsung Future Strategy Office, said at a media briefing.
It is rare for a top-profile country leader to visit the building in Seocho.
Chinese President Xi Jinping did not visit the Seocho Tower, which is popular for meetings with CEOs of major technology companies, but not country leaders.
"The main reason the CPV leader chose to visit the tower during his visit to Korea is because Samsung is the biggest foreign investor in Vietnam. I think his visit was a goodwill gesture to continue the ongoing solid business partnership," said an official.
Details of the meeting were not revealed. Yoon Boo-keun, one of the three CEOs at Samsung Electronics and the president of the company's home appliances unit, attended the meeting. Yoon is considered the right-hand man of the company's vice chairman.
Samsung's total investment in facilities in Vietnam is estimated at about $8 billion.
Vietnam receives the second-largest investment from Samsung, after China. Samsung has invested more than $10 billion in the latter.
It started investing in Vietnam in 2008 with an initial capital fund of $670 million. In the six years since then, it has raised this by a factor of 10.
Samsung paid $1.7 billion out of a registered capital of $2.5 billion for a factory in the Yen Phong Industrial Park in Bac Ninh Province. Products built at the plant contributed $23.9 billion to export revenue for Vietnam in 2013, said officials at Korea's trade ministry.
Affiliates such as Samsung Electro-Mechanics and Samsung Display operate manufacturing facilities there, while Samsung Heavy Industry is in talks with the country to build a shipyard.
Last month, Samsung received a certificate of investment for a new $1 billion plant at the Saigon High-Tech Park (SHTP), focusing on manufacturing high-definition (HD) displays and assembling future HD displays, including curved and foldable screens.
In the Yen Binh Industrial Park in Thai Nguyen Province, Samsung also has a mobile phone factory with an investment of $3 billion.
"The latest Samsung factory at the SHTP will be freed from corporate taxes for the next six years. Tariffs for products to be produced by that plant will be 5 percent for the next four years," said another official, adding huge tax incentives and administrative support encourage Samsung affiliates to invest more.
"This is how it works. Vietnam is fully supporting businesses by Samsung, and Samsung is responding to such favors with more of a boost. This is a win-win strategy. By using the qualified and skilled workforce in that country, Samsung can produce its gadgets with a cut in labor costs," said the official.
Vietnam also approved Samsung's request for a dedicated terminal for the company's import and export processes at Hanoi's Noi Bai International Airport to save logistics time.
While Samsung is experiencing some difficulties in its mobile business hit by the rise of budget Chinese smartphone vendors, Lee said the conglomerate will not cut this year's hiring.
"Total recruitment this year will be similar to that of last year," said the executive.
yckim@koreatimes.co.kr