Samsung’s Massive Investment Plan in Vietnam
The details of Samsung’s investment plans have not yet been fully disclosed. However, following an official document from the Government Office conveying Deputy Prime Minister Hoang Trung Hai’s directive on strengthening investment cooperation with Samsung Group, the outline of this “grand investment plan” has begun to take shape.
The plan includes investments in the Vung Ang 3 Thermal Power Plant (Ha Tinh Province), Long Thanh International Airport (Dong Nai Province), participation in Vietnam’s shipbuilding industry, and cooperation in areas such as information technology and e-government development.
In fact, these intentions were first mentioned in the previous year when Samsung C&T (Construction & Trading) signed a Memorandum of Understanding (MOU) with Vietnam’s Ministry of Planning and Investment regarding cooperation in infrastructure investment and development.
At that time, the cooperation framework also covered the petrochemical refining industry, and Samsung later expressed interest in the Long Son Petrochemical Refinery Project. In the shipbuilding sector, Samsung showed interest in developing a shipbuilding facility in Khanh Hoa Province.
This investment strategy was reaffirmed a few days ago when Mr. Ha Chan Ho, former Ambassador of South Korea to Vietnam and currently Senior Strategic Advisor to Samsung Group, met with leaders of the Ministry of Planning and Investment. During the meeting with Minister Bui Quang Vinh, he shared Samsung’s interest in a wide range of investment sectors beyond electronics.
“We are also particularly interested in developing a Research and Development (R&D) Center in Vietnam,” said Mr. Ha Chan Ho.
He noted that Samsung’s current R&D Center is located in the PVI Building, owned by Vietnam National Oil and Gas Group (PetroVietnam), where approximately 800 engineers are employed. According to Samsung’s plans, this number would increase to 1,400 engineers within the year and reach 2,000 engineers by 2016.
According to Mr. Ha Chan Ho, Samsung’s largest R&D Center is currently located in India, and the company hopes that its Vietnam R&D Center will become one of its largest worldwide. However, to achieve this goal, Samsung requires land to build its own facilities rather than continuing to lease office space.
Regarding this issue, the Hanoi People’s Committee had previously proposed that Samsung establish its R&D Center in the Hoa Lac Hi-Tech Park. However, Samsung argued that a location too far from the city center would make it difficult to attract highly qualified engineers and therefore requested a site within the urban area.
In a recent directive aimed at promoting investment cooperation with Samsung, Deputy Prime Minister Hoang Trung Hai instructed the Hanoi People’s Committee to support and identify a suitable location for the construction of Samsung’s R&D Center.
The “Win–Win” Philosophy
During his meeting with Minister Bui Quang Vinh, Mr. Ha Chan Ho openly shared Samsung’s fundamental investment philosophy in Vietnam: creating benefits for both sides—a true “win–win” relationship.
This view was welcomed by Minister Bui Quang Vinh, who emphasized that only partnerships based on equality and mutual benefit could be sustainable in the long term.
“Samsung has earned high recognition in Vietnam because it has fulfilled its investment commitments seriously and efficiently. The company has also received some of the best investment incentives offered by the Vietnamese Government. Therefore, once Samsung generates profits from its operations, it should contribute to Vietnam’s development so that both sides can enjoy long-term benefits,” Minister Bui Quang Vinh stated.
Regarding this issue, Mr. Ha Chan Ho noted that Samsung Electronics Vietnam (SEV) had begun paying corporate income tax in 2013 after the expiration of its tax exemption period. The expected tax payment for 2014 was estimated at USD 60–70 million.
According to information from the Bac Ninh Industrial Zone Authority, Samsung paid nearly USD 92 million in taxes (equivalent to approximately VND 2 trillion) in 2013, including about VND 1 trillion in domestic taxes.
Beyond tax contributions, Samsung also made a significant impact on Vietnam’s economy. According to reports, in 2013 SEV accounted for nearly 20% of Vietnam’s total export turnover, exporting goods worth USD 23.9 billion. Its value-added contribution reached USD 7.6 billion, a figure unmatched by any other enterprise operating in Vietnam at the time.
SEV reported that its total imports of raw materials and components in 2013 amounted to USD 16.3 billion. In addition, it purchased USD 2.7 billion worth of materials and components from domestic suppliers. As a result, SEV achieved a localization rate of 33% during the year.
According to Samsung’s plans, with Samsung Electronics Vietnam Thai Nguyen (SEVT) expected to commence operations in March, Samsung’s exports from Vietnam were projected to reach approximately USD 35 billion during the year. The value-added contribution was expected to increase further as around 60 satellite suppliers continued stable production and supplied large volumes of parts and components to Samsung’s manufacturing operations.