Samsung Viet Nam President: Viet Nam is still attractive investment destination for foreign investors

President of Samsung Viet Nam Choi Joo Ho speaks at VGP's talkshow on foreign direct investment, Ha Noi, September 27, 2021. Photo: VGP

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As a longtime investor in Viet Nam, could you please share some information regarding Samsung’s business activities here as well as your evaluations of Vietnam’s investment environment?

President of Samsung Viet Nam Choi Joo Ho: Samsung Viet Nam is currently operating 6 factories located in Bac Ninh, Thai Nguyen and Ho Chi Minh City, along with a research and development (R&D) center in Ha Noi and a legal entity that handle sales. Samsung has officially invested in Viet Nam since 2008, with the total amount of capital reaching more than USD 17.7 billion.

At the moment, Samsung Viet Nam is extending its role beyond a vital global manufacturing stronghold in Viet Nam; we are building Samsung’s own R&D Center in Ha Noi, with the scale of investments reaching US$220 million, in order to raise the mid-term and long-term research and development capabilities. Currently, regarding the construction progress of the R&D Center, the rate of completion is more than 50%, and the center is expected to be inaugurated at the end of 2022.

When this R&D Center begins its operations, the number of Vietnamese engineers we employ will rise from 2,100 to 3,000. It is expected that they will be conducting research on artificial intelligence, 5G, Big Data and Internet of Things (IoT). In the long run, Samsung’s R&D Center shall play a part in raising the capabilities of the Vietnamese IT industry as well as Viet Nam’s competitiveness in the Fourth Industrial Revolution.

Even though the new wave of COVID-19 infections has been going on since April, in the first 6 months of this year, things are still favorable to Samsung when it comes to reaching the export targets. If the factory that manufactures household electrical appliances in Ho Chi Minh can quickly return to normal operations, the company is expected to exceed its export targets.

Now I would like to discuss Viet Nam’s investment environment.

Viet Nam is providing an attractive investment environment, not only for Samsung, but also for all foreign investors, which for instance includes: abundant labor resources, a stable socio-political situation, infrastructure for manufacturing and circulation along with investment incentives.

Recently, there have been unfavorable impacts that arise due to the COVID-19 pandemic. However, in the long-term Viet Nam is still an attractive investment destination for foreign investors.

Most notably, the strategic resolution no. 105 recently approved by the Prime Minister is a good piece of news for foreign investors.

Just as what the Prime Minister’s strategy has laid out, if Viet Nam implements effective pandemic response measures while also facilitating to a further extent the favorable conditions for circulation, manufacturing and the sustaining of stable supply networks, then foreign investments shall continue to be maintained.

In the midst of the many difficulties and challenges stemming from the COVID-19 pandemic, will Samsung make changes to its investment and business strategies in the upcoming period? If yes, then what will these changes entail?

President of Samsung Viet Nam Choi Joo Ho: Samsung Viet Nam has not changed its business strategies because of the COVID-19 pandemic. For instance, back in May and June when the 4th wave of COVID infections were evolving in a complex manner in Bac Ninh and Bac Giang, Samsung has faced many difficulties in the manufacturing of mobile phones. But thanks to the comprehensive support from the Prime Ministers, the central level ministries and branches as well as the local governments with the effective pandemic response measures, we managed to overcome the difficulties.

Most notably, Bac Ninh was the first locality to implement the 3 on-site policy, which is why Samsung could sustain production instead of halting the activities of its factories. Bac Ninh’s Management Board of Industrial Parks has also provided comprehensive support so that experts from the Republic of Korea could quickly enter Viet Nam, therefore we did not face any hurdles regarding development and the manufacturing of goods.

On the basis of the confidence that we have amassed after handling these crises, along with our trust in the Government of Viet Nam, we are constantly expanding investments. Up until now, Samsung has fully disbursed all of the approved investment capital, and every year we continue to further invest hundreds of millions of dollars.
In the upcoming period, we plan to continue our investments in order to stabilize the operations of factories, increase productivity and the quality of products. Specifically, every year we are still investing in manufacturing equipment for the 6 factories, while also diversifying our manufacturing portfolio to include 5G equipment or laptops.

As we have previously mentioned:  in the past, Samsung mainly invested into production lines. In the upcoming period, we shall raise the status of our businesses in Viet Nam to new heights, turning them into strongholds for research and development through the construction of the R&D Center.

Does Samsung have any recommendations for the Government and relevant organs regarding the conditions needed in order for FDI companies (including Samsung itself) to better conduct production and sales?

President of Samsung Viet Nam Choi Joo Ho: Samsung wholly supports the policy of the Government of Viet Nam in pursuing the dual goal – “effectively responding to the pandemic while also achieving economic development”. Most importantly, we understand the “force majeure” nature of the resolute measures recently taken to curb the 4th wave of COVID infections.

However, if the forceful measures continue to be applied in long periods of time, they could cause severe economic damage. Therefore, while it is true that we should pursue the dual goals of “effectively responding to the pandemic while also achieving economic development”, we need to also constantly review the level of harmony between these two goals.

Aside from that, sustaining the global supply networks of industrial parks is an essential and an incredibly important factor for businesses that are operating factories. Thus, building a scheme to ensure “uninterrupted production” under any circumstances is a pressing issue.

This means that, preferably, we would not have to halt the activities of our factories’ production lines under any circumstances. Instead, we would still continue our operations in accordance with the standardized guidelines and the predetermined courses of action.

Additionally, in our opinion, between different provinces in which industrial parks are concentrated, there should be common, standardized guidelines when it comes to pandemic response, so that the transportation of people and goods can occur smoothly, thereby reducing the damage to a minimum level in abnormal situations such as COVID outbreaks.

Recently, I am aware that the Northern region is coming to a consensus on building such policies. I hope that this consensus will eventually be a reality, and that it shall come to fruition./.

By Quy An