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S. Korean Large Enterprises Increasing Investment Abroad
Due to Slow Deregulation
S. Korean Large Enterprises Increasing Investment Abroad
  • By Jung Suk-yee
  • December 11, 2018, 15:31
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South Korean manufacturing companies’ overseas direct investment (ODI) jumped 160.6% to US$5.03 billion in Q3 this year compared to the same period of last year.

Large South Korean corporations’ overseas direct investment (ODI) increased for the second consecutive quarter with their domestic investment showing a significant decrease due to slow deregulation in the nation.

According to the Ministry of Strategy & Finance, ODI showed the highest growth in six quarters in the third quarter of this year. Specifically, ODI totaled US$13.11 billion during the period, up 33% from a year ago. For reference, the investment, which rose 61.4% year on year in Q1 of 2017, fell in Q4 of 2017 and Q1 of 2018 but rebounded in the following quarter.

The ODI from the manufacturing sector jumped 160.6% to US$5.03 billion. In April this year, LG Electronics announced that it would sign a contract with ZKW, an Austrian vehicle lighting manufacturer, to acquire 70% of its shares for US$770 million euros.

The ODI from the financial and insurance sector added up to US$3.88 billion, down 9.7% from a year earlier. It was followed by real estate (US$1.52 billion) and information and communications (US$550 million).
 

By investment destination, the direct investment in the United States increased 77% to US$3.74 billion, led by a series of M&A contracts in the sectors including pharmaceutical. That in China jumped 107.2% to US$1.48 billion and that in Austria skyrocketed from US$20 million or so to US$1.23 billion. That in Asia added up to US$4.41 billion, followed by North America (US$3.82 billion) and Europe (US$3.3 billion).