Investments of 30 Major Chaebols Up 9% to Over 20 Trillion Won in Q1

The 30 major business groups in Korea increased their investment by approximately 9 percent from a year earlier to 20.5 trillion won (US$20.1 billion) in the first quarter of 2014. Still, the total investment decreased by 4 percent when the Samsung Group, the sum of which soared by as much as over 48 percent during the same period, was counted out. That of the 25 groups excluding the top five fell by 13 percent, too.

According to the data published by CEO Score on June 8, the 174 listed subsidiaries of the 30 major groups, excluding financial companies, invested a total of 20.513 trillion won (US$20.144 billion) in Q1 this year, which is 8.8 percent higher than the 18.85 trillion won (US$18.51 billion) of a year ago. Non-capitalized R&D costs such as ordinary research and development expenses were excluded from the calculation.

Their investment in the acquisition of tangible assets such as manufacturing facilities jumped 13 percent from 16.4 trillion won (US$16.1 billion) to 18.5 trillion won (US$18.2 billion), while that in the acquisition of intangible ones declined by 3.4 percent from 2.05 trillion won (US$2.01 billion) to 1.98 trillion won (US$1.94 billion).

The Samsung Group’s investment showed a sharp increase in just a year from 4.6 trillion won (US$4.5 billion) to 6.83 trillion won (US$6.71 billion). Samsung Electronics accounted for more than 90 percent of the sum by investing 6.2 trillion won (US$6.1 billion), which was divided into 3.3 trillion won in semiconductor facilities and 700 billion won in displays.

The SK Group’s investment increased 47.5 percent to 2.79 trillion won (US$2.74 billion). SK Hynix increased its investment by over 700 billion won to 1.3 trillion won (US$1.2 billion) to replace old equipment for the manufacturing of new memory semiconductor products.

The LG and Hyundai Motor Groups invested 2.7 trillion won (US$2.65 billion) and 2.2 trillion won (US$2.1 billion) in Q1, respectively. Each of the groups recorded a year-on-year rate of decline of 12 percent.

In the meantime, KT’s quarterly investment leaped 59.5 percent to 1.2 trillion won (US$1.1 billion) and Lotte’s increased by 15.5 percent to 530 billion won (US$520 million), whereas POSCO and CJ showed a rate of decrease of 47.5 percent to 1.19 trillion won (US$1.16 billion) and 24.5 percent to 460 billion won (US$451 million) each. The Hanjin Group increased its sum by 14.1 percent to 313 billion won (US$307 million) while Hyundai Heavy Industries’ fell 2.8 percent to 310 billion won (US$304 million).

The ratio of the Samsung Group’s investment to the total of the top 30 amounted to 33.3 percent in the first quarter, 8.9 percentage points higher than in the same period of last year. The total investment by those excluding Samsung declined 4.0 percent from 14.2456 trillion won (US$13.9891 billion) to 13.6807 trillion won (US$13.4344 billion).