Reasons why Korean enterprises want to invest long-term in Vietnam

DNHN - Economic and investment relations between South Korea and Vietnam have developed strongly. As a result, Korean businesses have been flocking to Vietnam to seek long-term business and investment opportunities.

Labor costs in Vietnam are lower than in many other countries

Vietnam has witnessed impressive economic growth in recent years. With an average GDP growth rate of about 6-7% per year, Vietnam is becoming an attractive market for international investors. This economic stability provides a safe and reliable environment for Korean businesses to invest and develop long-term.

Vietnam has made significant investments in developing infrastructure, including transportation systems, seaports, and industrial zones. This creates favorable conditions for Korean businesses in terms of goods transportation and supply of raw materials. High-quality industrial zones and special economic zones provide modern and convenient production spaces for foreign businesses.

Vietnam has a large, young, and competitive labor force. Vietnamese workers are known for their hard work and quick learning ability. Additionally, labor costs in Vietnam are lower than in many other countries in the region. This attracts Korean businesses to invest in manufacturing industries such as textiles, electronics, and automobiles, where labor is a crucial factor.

With a population of over 97 million people and increasing income levels, the consumer market in Vietnam is growing robustly. Korean businesses see great potential in accessing and providing goods and services to Vietnamese consumers. This helps create favorable conditions for Korean businesses to expand their business scale and increase sales.

The Vietnamese government has implemented various measures to improve the business environment and attract foreign investment. Vietnam has strengthened administrative reforms, reduced bureaucratic regulations, and created a stable legal framework to protect investors' rights. This builds confidence and motivation for Korean businesses when deciding to invest long-term in Vietnam.

South Korea is known for its strong technology and research and development capabilities. The cooperation between Korean and Vietnamese businesses in information technology, electronics, automobiles, and renewable energy is increasingly growing. Korean businesses want to invest long-term in Vietnam to leverage technological cooperation and research and development potential, thereby creating new products and services and enhancing their competitive capabilities in the international market.

Thus, Vietnam is seen as an attractive destination for Korean businesses when they seek long-term investment opportunities. The combination of stable economic growth, developed infrastructure, low labor costs, large consumer market, favorable business environment, and technological cooperation has created an appealing investment environment for Korean businesses. Vietnam and South Korea work together to promote bilateral economic and investment relations, bringing long-term benefits to both parties.

Many major companies want to invest long-term in Vietnam

On the morning of July 3rd, during the final working day of his visit to South Korea, Prime Minister Pham Minh Chinh met with six leading South Korean companies operating in Vietnam.

At each meeting, the leaders of these corporations expressed great joy and welcomed the Prime Minister's presence during his visit to South Korea, stating their belief in the strong development of relations between the two countries. They also highly appreciated the increasingly improved investment and business environment in Vietnam.

The Prime Minister met with Mr. Chang In Hwa, Chairman of Posco Group - one of South Korea's leading companies with a revenue of USD 59 billion in 2023.

At the meeting, Mr. Chang In Hwa showed particular interest in the fields of clean energy and gas-fired power plants, as well as a desire to participate in the exploitation and processing of rare earths in Vietnam. Posco also proposed converting a specialized port in Ba Ria - Vung Tau into a commercial port.

Responding to each of Posco's proposals, Prime Minister Pham Minh Chinh stated that Vietnam wants to strengthen international cooperation and attract investment in the rare earth sector, emphasizing fair, healthy, open, and transparent competition among investors from various countries, focusing on high technology, sustainable exploitation, deep processing, and environmental protection.

Additionally, the Prime Minister suggested that Posco consider participating in LNG thermal power projects in Thanh Hoa and Nghe An.

Regarding the port function conversion, the Prime Minister asked the group to submit specific proposals to the relevant Vietnamese authorities for consideration and resolution based on current planning and regulations, ensuring environmental protection and mutual benefits.

Encouraging the groups to expand their investment in Vietnam, the Prime Minister affirmed that Vietnam will accompany and support the groups to invest, build, and develop their projects in Vietnam effectively, successfully, and for mutual benefit.

Meanwhile, Mr. Cheoldong Jeong, CEO of LG Display, confirmed that Vietnam is LG's global key production location. To date, the group has disbursed over USD 5 billion in investment.

On this occasion, LG Display's leadership also discussed plans to continue investment in the upcoming phase, including the LG Innotek plant in Hải Phòng, which, upon completion, will double its capacity, forming a closed LG production complex.

The Prime Minister welcomed and suggested LG increase the localization rate, facilitating Vietnamese businesses' participation in LG's supply and production chains.

Similarly, Mr. Jung Won Ju, Chairman of Daewoo E&C Group, who is also the Chairman of the Korean Housing Construction Association.

The group's leadership stated that Daewoo E&C wants to invest in building projects in energy, power plants, industrial zones, and infrastructure in Vietnam, such as O Mon 3 and 4 thermal power plants, LNG Hai Lang, and LNG Long An.

In real estate, the group aims to successfully apply and develop the smart city model in Starlake Urban Area, develop new urban projects in Thai Binh and other localities.

At the previous meeting with Prime Minister Pham Minh Chinh, Mr. Euisun Chung, Executive Chairman of Hyundai Motor Group, expressed a desire to expand business operations and readiness to transfer new technologies and invest in new techniques in Vietnam, especially in the context of the growing global and Vietnamese electric vehicle market.

Appreciating Vietnam's strength in high-quality young human resources, Hyundai Motor Group also mentioned plans for training and developing Vietnamese talent in the automotive industry.

Nghe Nhan