South Korean soju maker HiteJinro is eager to complete procedures for its $100 million manufacturing plant in Lien Ha Thai Industrial Park in the northern Thai Binh province.
“The project comes 100 years since HiteJinro’s establishment and would see Vietnam turn into its first overseas manufacturing base. The factory will serve as a base for expansion into other regions in Southeast Asia and eventually, the group’s global market,” Jang In-seop, senior managing director of HiteJinro, said in mid-June.
HiteJinro, South Korea’s top alcoholic beverage maker, plans to build a plant 11 times the size of a football field inside the industrial complex.
The company plans to break ground on the factory in the first half of next year, with an aim for completion in 2026 to distribute the products worldwide. Once up and running, the plant will initially have an annual production capacity of one million boxes of fruit-flavoured soju.
Along with the north, the central region, especially Danang city, is seen as a favourable destination for ICT investment from South Korea.
Head of the Consulate General of South Korea in Danang, Kang Boosung, at the Vietnam-Korea Extended Investment forum in Quang Nam in June, said, “The bilateral relationship between both nations has lots of potential over the next 30 years, with investment from South Korean businesses expanding from traditional production to new industries in high-tech and green energy.”
The attention of South Korean investors in the central region is also seen in investment promotion events in other localities in the same month. This includes an event organised by the Danang Investment Promotion Agency with the participation of nearly 30 representatives from the organisations, and businesses from South Korea, that operate in the semiconductor, AI, and energy industries.
To attract South Korean investors in these areas, Danang offers a special preferential mechanism, which was approved in late June. The Vietnamese National Assembly last week passed a resolution to allow Danang to establish a free trade zone (FTZ).
The zone, which is an urban administration enjoying trial of special policies for the city’s development, will feature functional areas, including manufacturing, logistics, and trade-service areas. It will function as a hub for import-export processing in line with law on customs and trade.
Le Hoang Phuc, director of Danang Semiconductor and AI Centre for Research and Training, said, “Once the resolution comes into effect in 2025, foreign investors will not be required to launch projects or complete procedures to apply for or adjust investment certificates before setting up economic establishments in the FTZ.”
South Korea is currently the largest foreign investor in Vietnam, with a presence in 19 of 21 economic sectors and 59 of 63 localities throughout the country, according to the Foreign Investment Agency under the Ministry of Planning and Investment.
South Korean investors currently operate nearly 10,000 projects, with total capital of about $87 billion. Samsung, LG, and Hyosung are the three largest South Korean partners investing in Vietnam.
At a meeting with Deputy Prime Minister Le Minh Khai in mid-May, COO of Hyosung Corporation Lee Sang Woon said that since 2007, the corporation has poured over $4 billion in Vietnam in areas like raw materials, textiles, the chemical industry, and industrial electrical systems.
“The company’s latest venture is a $730 million carbon fibre factory in the southern province of Ba Ria-Vung Tau, focusing on advanced materials and environmentally friendly bio-BDO biological products,” Woon said. “We are also seeking government support to invest in a factory producing ATMs in Vietnam and a big data centre in a high-tech park in Ho Chi Minh City.”
The Korea Chamber of Business in Vietnam has attributed a rise in South Korean investment in Vietnam to the Vietnam-Korea Free Trade Agreement, which has facilitated a rise in trade in which South Korean firms imported a large volume of products from their homeland into Vietnam for their own production.
Trade between the two countries has made a strong leap from $43.7 billion in 2015 to $76.1 billion last year. In the first five months of this year, the figure hit $31.9 billion, with Vietnam’s exports of $10.4 billion - up 12.8 per cent on-year, and South Korea’s exports worth $21.5 billion - up 6.6 per cent on-year.