South Korean investors in Vietnam are moving from light industry into heavy and service industries in line with developments in Vietnam’s economy, said Choong-Shik Kang, chairman of the Korean Chamber of Commerce and Industry (Kocham) in HCM City in a recent meeting.
S.Korean companies, which had previously invested in light industries such as footwear and garment to make use of Vietnam’s advantage of cheap labor, have shifted to heavy industries like manufacturing iron and steel products, which require less labor but much more investment.
Posco VST Company Limited, a subsidiary of S.Korea-based Posco Group, has recently built a stainless steel mill in Vietnam, he said.
Businesses from the East Asian country are also moving to banking and service industries, the Thoi bao Kinh te Sai gon newspaper quoted Choong-Shik Kang as saying.
Korea Investment & Securities Co., Ltd. (KIS), one of the leading stock brokers in S.Korea, has recently acquired a 49% stake of Vietnam’s Empower Securities Corp.
Kocham in HCM city said around 2,500 S.Korean businesses are operating in Vietnam, including 1,253 ones in the central and southern regions. About 40% of the companies are investing in heavy and service industries and property.
S.Korea was the second biggest foreign investor in Vietnam, with total $2.04 billion in 2010 and $22.13 billion at end-2010.
Vietnam’s counselor for investment in S.Korea Nguyen Thi Minh Hien said Korean investment will focus on energy, infrastructure, and natural resource exploitation in Vietnam in coming years.
S.Korean government and large corporations are seeking to be partners in the construction of Vietnam’s third nuclear power plant, Hien added. (Saigon Economic Times)
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