HANOI--LG Electronics Inc. (066570.SE) will spend up to $1.5
billion to expand production in Vietnam, which is emerging as an
important manufacturing base for electronics makers seeking to take
advantage of a low-cost and well-educated workforce.
LG plans to build up a production complex in Haiphong City, 100
kilometers east of Hanoi, over the next 10 years, it said in a
statement. The first factory in the 40-hectare complex is scheduled
to start production of televisions and household appliances in the
second half of next year. It will also relocate its two existing
plants in Vietnam to the complex.
The majority of the goods produced in LG's Vietnam facilities
will be sold locally, the company said. Its existing plants in the
country have a combined annual production capacity of 750,000 TV
sets, 400,000 cell phones, 150,000 air conditioners, 500,000
washing machines and 500,000 vacuum cleaners.
"For global companies like LG, Vietnam is an attractive place to
invest," said LG Electronics spokesman Ken Hong. "The country is
politically stable and has a young, increasingly well-educated
workforce."
Vietnam, with a population of 92 million people, has attracted
other global electronics companies such as Samsung Electronics Co.,
Foxconn Technology Co., Intel Corp. and Canon Inc., which account
for a large proportion of Vietnam's total export revenue.
Samsung earlier this year started building a $2 billion complex
in the northern province of Thai Nguyen to produce smartphones and
other electronics products. It also has a $1.5 billion plant in Bac
Ninh province and another in Ho Chi Minh City.
According to government data, exports of electronics products
from Vietnam, including computers, cellphones and cameras and
components, rose nearly 90% last year to $22.25 billion, accounting
for 19.4% of total export revenue.
Write to Vu Trong Khanh at trong-khanh.vu@wsj.com
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