HANOI (Reuters) - A unit of South Korea’s Samsung Electronics won Vietnamese government approval on Tuesday to raise its investment in an electronics plant to $2 billion, part of a wave of projects in Vietnam by global consumer goods giants.
A Ho Chi Minh City government official said the Vietnamese government had given a green light to Samsung Asia Pte Ltd [SAMECP.UL] increasing its investment in the city’s Saigon Hi-Tech Park (SHTP) from a previous $1.4 billion.
The expansion by Samsung, Vietnam’s biggest foreign investor, comes amid similar moves by global electronics giants to boost operations in the communist country, tapping wages lower than China and the prospect of tariff cuts from a series of free trade deals with major markets.
The additional $600 million will go into production of Samsung’s Smart televisions and other electronic goods, as well as research and development work, SHTP chief Le Hoai Quoc told Reuters by telephone.
Vietnam is seeing strong factory output in line with its broader economic growth, including televisions, mobile phones and electrical appliances made for the likes of LG, Panasonic, Toshiba < 6502.T> and Sony.
A unit of Samsung Electronics earlier this year announced it would increase investment in Vietnam by an additional $3 billion to boost display module production capacity amid smartphone price competition.
Samsung group has pledged more than $12 billion of investments in Vietnam. Its engineering unit, Samsung C&T, in October announced a preliminary agreement with the government towards setting up a $2.4 billion thermal power plant on a build-operate-transfer basis.
Production by Samsung at the Saigon Hi-Tech Park would start in late February or early March, Quoc added.
Other tech firms operating at the park include Microsoft, Intel, Rockwell Automation and Vietnam’s FPT Corp
Vietnam is estimated to export more than $46 billion worth of mobile phones and electronics this year, up 33 percent from 2014, or nearly a third of its total overseas shipments.
Reporting by Mai Nguyen; Additional reporting by Vincent Lee in Seoul; Editing by Martin Petty and Adrian Croft