In the midst of the US-China trade war and the unexpected minus growth rate of the economy in Q1 2019, South Korean chaebols are looking for growth by penetrating emerging markets.
SK Group
South Korean investors were the earliest birds in Vietnam. Soon after the economy opening in 1990s, a series of footwear, garment and electronics assembling factories opened in Vietnam, namely Chang Shin, Taekwang Vina, Hyosung, Dongwon and LG.
In 2009, Vietnam witnessed a big South Korean investment wave following the establishment of Samsung’s electronics assembling complexes in Bac Ninh and Thai Nguyen. Following the footprints of the giant, thousands of satellite suppliers flocked to Vietnam, helping Vietnam emerge on the world’s hi-tech map.
But South Korean investors’ tastes have changed. Instead of making direct investment, South Korean chaebols are acquiring assets and valuable brands. SK Group, the third largest conglomerate, announced $1 billion investment in Vingroup to acquire 6.1 percent of shares.
In 2009, Vietnam witnessed a big South Korean investment wave following the establishment of Samsung’s electronics assembling complexes in Bac Ninh and Thai Nguyen. Following the footprints of the giant, thousands of satellite suppliers flocked to Vietnam, helping Vietnam emerge on the world’s hi-tech map.
In 2018, SK Group invested $500 million into Masan Group, the Vietnamese leading consumer goods manufacturer. Prior to that, the giant set up SK South East Asia Investment, an arm in charge of seeking investment opportunities in Vietnam.
Analysts commented that SK Group made a wise move when cooperating with Vingroup. With the deal, SK can provide batteries to automobile, motorbike and bus production lines of VinFast, a subsidiary of Vingroup, and to the Vsmart smartphone production line as well.
The VinFast factory is designed to produce 250,000 cars for the first phase and 500,000 cars when it operates at full swing.
Meanwhile, its electric motorbike production line is expected to churn out 500,000 products, and the smartphone factory has the capacity of 5 million per annum.
South Korea’s footprints in all business fields
Nhip Cau Dau Tu commented that from footwear, and textile and garments to electronics, South Korean companies have expanded their operation into other core business fields of Vietnam’s economy, with strength equal to leading Vietnamese corporations, and Japanese and Chinese rivals.
After 10 years of operation, Samsung’s total turnover in Vietnam reached $65.73 billion in 2018, far exceeding Vietnam’s state-owned groups which are described as the ‘iron fists’ of the economy.
Electricity of Vietnam (EVN), for example, reported revenue of $14.6 billion for 2018, the national oil and gas group PetroVietnam $27 billion and Viettel $10 billion.
In the real estate sector, the ‘South Korean hallmark’ can be seen in Eco Smart City Thu Thiem from the Lotte Group, and GS Metro City from GS E&C, in Nha Be district in HCMC.
According to a report on Vietnamnet
