The nation’s top business groups, including Samsung, Hyundai Motor, SK and LG, are expected to unveil a new investment plan during the state visit of President Park Geun-hye to China in a bid to woo the world’s largest market and for business expansion, industry sources said.
On Friday, SK Group, the nation’s third-largest conglomerate, announced a joint-venture between its chemical subsidiary SK Global Chemical and China Petrochemical Corp., or Sinopec, China’s state-run and largest oil company. The joint venture, in which SK Global Chemical secures a 35 percent stake, will run a NCC (naphtha cracking center) facility, which was recently completed in Wuhan, the capital city of Hubei province in central China, the company said. SK put 3.3 trillion won ($2.8 billion) into this facility investment. The joint-venture firm will start commercial operations of the NCC plant from the latter part of this year.
SK Global Chemical has continued to invest in China targeting China’s fast-growing high-value chemical market.
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Business leaders accompanying President Park Geun-hye in her visit to China talk at a breakfast meeting at Diaoyutai Hotel in Beijing on Friday. From left are Korea Business Women’s Federation chairwoman Kim Soon-ok, Hyundai Group chairwoman Hyun Jeong-eun, GS Group chairman and Federation of Korean Industries chairman Huh Chang-soo, Korea Small and Medium Industry Promotion Association chairman Park Sang-hee, and Hyundai Motor Group chairman Chung Mong-koo. (Yonhap News) |
Industry watchers predicted additional large-scale facility investment by Hyundai Motor Group in China, pointing out the itinerary of Hyundai Motor Group chairman Chung Mong-koo in China.
During his stay in China until Sunday, Chung will visit China’s western region which the company is eyeing for the location of its fourth car plant in China.
Hyundai has become the third-best-selling car brand in China and the company expected to max out the production capacity of three Chinese plants by 2015 and 2016.
Xian in Shanxi province, and Chengdu and Chongqing in Sichuan province are reportedly on the list of candidates for the destination of Hyundai’s fourth car plant.
Industry sources said talks for a new Hyundai plant in China are expected to gain steam when Chung returns.
Samsung Group is also expected to develop the additional investment plan to China to achieve its annual sales goal of $100 billion. Samsung Group, which runs 39 production sites and 46 sales offices in China, marked $60 billion in Chinese sales last year. Samsung Group has posted double-digit growth in China for years, backed by explosive demand for Samsung’s high-tech goods. For instance, China is Samsung’s biggest Smartphone market.
As for major investment projects underway in China, Samsung is building a semiconductor production site in Xian, Shanxi province.
On top of this, Samsung Display, a Samsung Group affiliate, is pushing to build a state-of-art LCD production line in Suzhou, Jiangsu province, eastern China.
Besides investment for business expansion in China, the Korean companies doing business there unveiled their social contribution plan to the country in an effort to raise the brand image of “Korea Inc.”
South Korean companies operating in China will spend 75 billion won ($65 million) on the improvement of Chinese social welfare services this year, the Korea Chamber of Commerce Industry, a local lobby group, said Friday.
“A total of 23 companies, including Samsung, E-Land, Hyundai Motor, LG Electronics and SK, will provide a combined 43.27 million yuan ($7.04 million) to fellowship programs, charities and the community development project of China this year,” KCCI chairman Chang Won-kie said.
“Korean companies are keen to build their reputation in China, the nation’s largest export market, by engaging with its society.’’
China is the nation’s largest trading partner, beating the United States, as of 2013. Korea’s cumulative exports to China stood at about $1 trillion in 1992-2013, with its cumulative imports from the world’s second-largest economy reaching $696.9 billion, according to the Federation of Korean Industries.
By Seo Jee-yeon (
jyseo@heraldcorp.com)
