Samsung Electronics Co., the biggest smartphone manufacturer in the world, is nearing approval for its second plant in Thai Nguyen province and said it would invest as much as $3 billion in the project in an effort to expand its handset facilities in Vietnam and turn the country in one of its manufacturing centers.
The chairman of the local Peoples Committee – Duong Ngoc Long revealed in a telephone interview that the project is expected to secure an approval as early as tomorrow. If the process is successfully finalized, the total investment of Samsung in Thai Nguyen province will amount to $6.4 billion.
One of the senior officials at the Planning and Investment Department of the Vietnamese province, who was not authorized to officially comment on the matter and asked not to be named, said in a statement, cited by Reuters: “We are working on the project. There are still a few things to fix.”
The company confirmed that it has been negotiating with the countrys government. One of Samsungs spokeswomen explained that the new investment may be considered as an expansion in the same province of the already existing handset manufacturing line, which was estimated to be about $2 billion.
Samsung also explained that it is finalizing the last details with authorities, but there has not been made a specific schedule or investment size for the transaction. The company has become a leader of a wave of technology companies, which turn to Vietnam considering the opportunity to get young and low-cost workforce in conditions of favorable tax benefits.
Samsung opened a factory in Vietnams Thai Nguyen province in March 2014. The Chairman of the Peoples Committee Mr. Long explained in an interview earlier this year that Samsung will not be charged with taxes for the first four years. It will also pay half the full rate of taxes over the following nine years for its first plant. Now the new factory is said to be located in the same complex and will boost the companys total investment in Vietnam to $11.2 billion.
Samsung Electronics Co. Ltd gained 5.14% on Monday and closed at KRW 1 268 000 per share in Seoul. The company is valued at KRW 198.83 trillion. Shares of the company were up 3.58% at €466.00 by 15:28 GMT in Frankfurt.
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