Vietnam Investment Review (VIR) reported besides Samsung Electronics that has already committed US$5.7 billion in investment, other Samsung companies are eyeing mammoth thermal power, aviation and shipbuilding projects in the country.
Although its investment plan is not unveiled yet, the Government Office recently announced Deputy Prime Minister Hoang Trung Hai’s instructions on strengthening investment cooperation with Samsung group.
The group plans to invest in the Vung Ang 3 thermal power plant in Ha Tinh, Long Thanh International Airport in Dong Nai, a shipyard in Khanh Hoa, and even in information technology and e-government projects.
Last year, Samsung C&T and the Vietnamese Ministry of Planning and Investment (MPI) signed a memorandum of understanding (MoU) on cooperation in infrastructure investment and development for Samsung-funded projects.
At a recent working session with MPI Minister Bui Quang Vinh, senior Samsung advisor Ha Chan Ho expressed the group’s desires to expand operations in Vietnam, apart from its traditional area - electronics.
He revealed Samsung wants to enlarge its Research and Development Centre in Vietnam, which is located inside the Petro Vietnam Insurance (PVI) building under a lease contract.
The centre currently employs 800 engineers and expects to raise the figure to 1,400 in 2014 and 2,000 in 2016. The group aims to turn the Vietnam-based centre into one of its largest in the world in the coming years.
Samsung now needs a land fund in the city centre to build its R&D centre instead of a previously suggested location at Hanoi’s Hoa Lac hi-tech park. Deputy PM Hoang Trung Hai recently asked the Hanoi Municipal People’s Committee to work on Samsung’s proposal.
Win-win cooperation
At the working session with Ha Chan Ho, MPI Minister Vinh hailed Samsung’s win-win cooperation, saying this principle will benefit both sides and ensure long-term cooperation.
Samsung has been applauded for meeting its commitments to the Vietnamese government. After enjoying corporate income tax exemptions under current investment incentives, Samsung Electronics Vietnam (SEV) began paying the tax in 2013 and its 2014 corporate income tax is estimated at between US$60-70 million.
Samsung electronics plants in Bac Ninh province alone handed in nearly US$92 million (VND2 trillion) worth of taxes, including VND1 trillion in local taxes.
A SEV report shows SEV exports hit US$23.7 billion in 2013, making up nearly one fifth of Vietnam’s total export earnings. The localisation rate in its products also rose to 33% in the same year.
A US$2.5 billion SEV-invested electronics plant got off the ground in Thai Nguyen province last year and, when the plant is put into operation in March 2014, Samsung said it expects to raise its 2014 export value to US$35 billion.
With such an ambitious investment plan, Samsung aims to turn Vietnam into a premier leading production base in Asia.
