Hyosung Group is planning to tap into the world market with Vietnam as a global complex production base, said Chairman Cho at a meeting with Vietnamese Prime Minister Nguyen Xuan Phuc on February 8.
Vietnam is fast becoming attractive destination for foreign investment.
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Last year, Hyosung has invested a total of US$1.3 billion in Ba Ria Vung Tau Province in the southern part of Vietnam for a polypropylene plant, a dehydration (DH) facility for the plant, and a liquified petroleum gas (LPG) storage tank. In addition, Cho also said that Hyosung Group was considering the establishment of an additional manufacturing subsidiary in Quang Nam Province in the central region of Vietnam.
Cho also mentioned orders for infrastructure projects in Vietnam. Hyosung Group was able to successfully carry out power transmission and construction projects with its technology and transferring this technology will help Vietnam transform itself into an exporting country in the high voltage transformer sector, Cho told the Vietnamese Prime Minister.
In addition, Cho brought up the promotion of information technology (IT) projects, such as energy storage systems (ESSs), ATMs, electronic payment, and fintech to the Prime Minister. Cho also proposed holding a Korean Investment Forum to promote Vietnamese investment opportunities to Korean companies and received positive responses from the Prime Minister.
Cho took the initiative to make a foray into Vietnam about ten years ago, saying that Hyosung Group should prepare for a drop in the competitiveness of its factories in China due to an inevitable rise in labor costs and tougher regulations. In particular, last year, China strengthened retaliatory measures against South Korea for the deployment of the anti-missile THAAD system, which reinforced Cho's attachment to Vietnam.
In the meantime, Hyosung Group has invested US$1.5 billion since establishing a Vietnamese corporation at Nhon Trach Industrial Complex near Ho Chi Minh City in 2007. The Vietnamese corporation is the largest investment by a Korean company in the industrial complex. The company produces textiles and core industrial materials such as spandex, tire cords, steel cords, and electric motors on a land area of more than 90,000 square meters, employing upwards of 7,000 people.
Vietnam is fast becoming a popular destination for direct investment by multinationals due to its free trade agreements with various countries. The nation also boasts cheap labor costs and a location optimal for Chinese and Thai supply chains.
South Korea was the biggest direct investor in Vietnam between 2014 and 2016. Samsung Electronics runs two factories in the country, which are responsible for 30% of the group's global smartphone production. Samsung also plans to ramp up the production of televisions, refrigerators, and other household appliances in Vietnam. LG Group and other South Korean concerns are actively investing in the country as well.
