|Samsung is one of the Korean enterprises investing in Vietnam the most in recent years. Photo: Tran Ngoc
Attracting great investment
Korea has been one of Vietnam’s largest investment partners for many years, making an important contribution to Vietnam’s economic development.
For Korean enterprises investing in Vietnam, Samsung’s investment project with a total investment value exceeding the threshold of US$20 billion must be mentioned when recently (June 2022), Samsung decided to increase investment capital by US$841 million for Samsung Complex HCMC – SEHC (Samsung’s largest global TV and home appliance manufacturing factory).
Another Samsung project in Thai Nguyen – Samsung Electro-mechanics Vietnam (SVMC) also raised capital by US$267 million in June. With these new investments, Samsung continues to maintain its position as the largest foreign investor in Vietnam.
According to the Foreign Investment Agency, Ministry of Planning and Investment, in the first six months of 2022, Korean investors have registered to invest in Vietnam over US$2.66 billion, accounting for nearly 19% of the total investment capital, up 29.6% over the same period last year.
Trade turnover between Vietnam and Korea reached US$500 million in 1992, by 2021, it increased to US$78 billion. The two sides are aiming for bilateral import and export growth to reach US$100 billion in 2023 and US$150 billion in 2030.
Many other large corporations in Korea have also continued to choose Vietnam as an investment destination with large projects.
Hanwha Group has recently entered into a joint venture with Vietnam’s T&T Group to invest in the Hai Lang Gas Power Project (Quang Tri), the investment capital of the first phase is US$2.3 billion. Or LG Group with two capital increases in 2021 for LG Display, bringing the total investment capital of LG Display in Vietnam to US$4.65 billion.
Amkor has also invested in a semiconductor manufacturing project in Bac Ninh, with the scale of the first phase being US$500 million.
Kwon Sung-Taek, Vice President of the Korea-Vietnam Economic and Cultural Association (KOVECA), said that in the ASEAN region, the bilateral trade turnover between Vietnam and the Republic of Korea was equal to the total bilateral trade turnover of Korea with the remaining nine countries. Regarding production investment, Korean enterprises contributed about 25% of Vietnam’s total export turnover.
Korean enterprises have strengths in technology, techniques, experience and capital. Vietnam has abundant human resources. Previously, Korean enterprises invested in Vietnam with many labour-intensive industries, but in the future, the investment trend will change with many manufacturing and high-tech industries.
Korea aimed to increase bilateral trade turnover to US$100 billion in 2023 and US$150 billion in 2030 towards a balanced and sustainable direction, increasing the volume of Vietnam’s exports to Korea; encouraging Korean enterprises to increase investment in spearhead industrial fields in parallel with technology transfer to Vietnam; continuing close cooperation in the field of science and technology, including the implementation of the second phase of the Vietnam – Korea Institute of Science and Technology (VKIST) project, Mr. Kwon Sung-Taek said.
Creating a favourable environment
Although appreciating the investment potential in Vietnam, speaking at the Conference on Investment Promotion of Korean FDI in Vietnam last weekend, a number of Korean enterprises reflected the legal document system for investment activities in Vietnam was constantly changing, causing many problems.
Therefore, Korean investors want Vietnam to have more consistency and transparency in policy regulations, especially investment attraction policies.
Mr. Pham Huu Thang, Vice President, General Secretary of the Association for Communication with overseas Vietnamese, former Deputy Director of the Foreign Investment Department, Ministry of Planning and Investment, acknowledged that Vietnam was ready to welcome foreign Korean investors cooperate, the partners also had demand and desire to seek investment opportunities. Besides the advantages, there were still certain challenges, so the two sides should exchange regularly to share and update information and each other’s demand to move towards more specific and effective cooperation.
Faced with concerns about investment procedures of Korean enterprises, leaders of many localities having a large number of investment projects of Korean enterprises such as Bac Ninh, Long An, Dong Nai and Khanh Hoa said that these localities were ready to welcome and create conditions for Korean investors to look for investment opportunities.
As one of the localities that attract a lot of investment from FDI enterprises, including Korean ones, Vice Chairman of Bac Ninh Provincial People’s Committee Ngo Tan Phuong said that the province currently had 590 projects with a total capital of about US$14 billion. In which, Samsung was a major investor in the province along with a chain of satellite companies, contributing to a large export turnover of about US$45 billion, creating jobs and collecting local budgets. That was the success of the province in attracting FDI, especially Korean enterprises.
Bac Ninh focused on investing in infrastructure for industrial parks (currently, Bac Ninh had 36 industrial parks ready to welcome new investors), expanding and investing in new traffic routes, and ensuring electricity supply for industrial zones. In particular, Bac Ninh province had a customs clearance port ICD Tan Cang – Que Vo ICD, and established an interdisciplinary team ready to answer all questions of enterprises, and regularly organized dialogues between provincial leaders and FDI enterprises.
Ms. Nguyen Thi Hoang, Vice Chairman of Dong Nai People’s Committee, said that Dong Nai province currently attracted more than 1,500 FDI projects with a total investment of about US$33 billion, of which Korean investors had 426 projects with an investment capital of US$7 billion. Korean enterprises investing in Dong Nai were mainly supporting industries, producing electronic components. To continue to attract FDI, Dong Nai plans to build eight new industrial parks with a total area of 8,500 ha. Unlike before, Dong Nai would attract investment selectively, giving priority to high-tech and innovative science projects.