MOSCOW, October 3 (RIA Novosti) - Consumer electronics conglomerate Samsung is set to build a massive production facility in Vietnam worth 1.4 billion USD, Yonhap News Agency reported.
Speaking about the deal, a company official said that it was part of a “win-win strategy” for both countries: Vietnam would receive “a boost” to its high-tech industry potential, and Samsung will obtain a “qualified and skilled workforce” at a low cost.
Samsung Vice Chairman Lee Jae-yong met with General Secretary Nguyen Phu Trong and other officials from the Vietnam in Seoul on Wednesday to discuss cooperation between the tech giant and the communist country.
When the facility’s construction and that of two others are taken into account, the company will have invested over 8 billion USD in the country since 2008.
The new complex will be built outside Vietnam’s Ho Chi Minh City on a 70 hectare lot, and will produce televisions, air conditioners, washing machines, and other home electronics. The plant will be exempt from paying corporate taxes for six years, after which it will begin paying a 5 percent tax rate, Yonhap said.
The company already operates several large plants across the country, which produce smartphones and electronic parts. It is also building a 1.23 billion USD plant to produce smartphone components, and a 1 billion USD television display parts plant, approved this July.
The Vietnamese government recently approved a dedicated terminal at Hanoi’s Noi Bai International Airport for the company, and its grandiose ambitions include the opening of a private shipyard; talks are under way.
Cao Viet Sinh, a Vietnamese government advisor and former minister of planning and investment, has estimated that Vietnam will export 20 billion USD worth of Samsung products this year, noting that Samsung and South Korea in general have quickly grown to become one of the largest sources of foreign direct investment in Vietnam in recent years.
Vietnam has seen a large inflow of high-tech manufacturers make big investments, having shifted production out of China due to rising costs and reduced labor force availability, including Microsoft’s Mobile division, Intel and South Korea’s LG Electronics.
Electronics now comprises 24 percent of Vietnam’s total exports, amounting to over 31.8 billion USD last year after more than doubling from the year before.