The Hyosung Group will significantly expand investment in the chemical and heavy industry sectors in Vietnam. Hyosung Group chairman Cho Hyun-jun is planning to tap into the world market with Vietnam as a global complex production base.
According to the Hyosung Group on February 11, chairman Cho said that the group will reinforce business cooperation with Vietnam in a meeting with Vietnamese Prime Minister Nguyễn Xuân Phúc in Hanoi, Vietnam on February 8. "We will expand our business not only in spandex and tire cords but also in the chemical and heavy industry sectors," chairman Cho said.
Chairman Cho came up with a specific blueprint for investment in the chemical and heavy industry sectors. Since last year, Hyosung has invested a total of US$ 1.3 billion in Ba Ria Vung Tau Province in the southern part of Vietnam for a polypropylene plant, a dehydration (DH) facility for the plant and a LPG storage tank. In addition, chairman Cho also said that the Hyosung Group0 was considering the establishment of an additional manufacturing subsidiary in Quang Nam Province in the central region of Vietnam.
Hyosung worked out a strategy to manufacture semi-finished products in Vietnam based on based on cost competitiveness its cost competitiveness and make them into completely finished products at a factory in Changwon, Korea and export them abroad. The strategy aims to increase exports based on price competitiveness while boosting the productivity of factories in Korea.
The expansion of Vietnam's investment in the heavy industry and chemical sectors is construed as the Hyosung Group’s will to grow Vietnam into a global complex production base in letter and in spirit by building production facilities for its four core product groups (PGs) in Vietnam. "Once additional investment projects are completed, Hyosung Vietnam will have a complex production base that will produce products for all of its business segments for the global market," a Hyosung official said.
Chairman Cho also mentioned orders for infrastructure projects in Vietnam. The Hyosung Group was able to successfully carry out power transmission and construction projects with its excellent technology and its technology transfer will help Vietnam transform itself into an exporting country from an importing country in the high voltage transformer sector, chairman Cho told the Vietnamese prime minister. In addition, chairman Cho brought up and discussed the promotion of information technology (IT) projects such as energy storage systems (ESSs), ATMs, electronic payment and fintech with Prime Minister Nguyễn. Chairman Choi also proposed holding a Korean Investment Forum to promote Korean companies’ investment in Vietnam and received positive responses from the prime minister.
Chairman Cho has been taking the initiative in making a foray into Vietnam since about ten years ago, saying that the Hyosung Group should prepare for a drop in the competitiveness of its factories in China to be caused by a rise in China's labor cost and tougher regulations. In particular, last year, China's retaliatory measures against South Korea for the deployment of the anti-missile THAAD system strengthened, this led chairman Cho to have a stronger attachment to Vietnam.
In the meantime, Hyosung has invested US$1.5 billion since establishing a Vietnamese corporation at Nhon Trach Industrial Complex near Ho Chi Minh City in 2007. The Vietnamese corporation is the largest investment by a Korea company in the industrial complex. The company produces textiles and core industrial materials such as spandex, tire cords, steel cords, and electric motors on land of more than 90,000 square meters, employing upwards of 7,000 people.