South Korea’s chaebols to up spending by over $100 billion: Report
Korea’s top 30 conglomerates, including Samsung and Hyundai, plan to invest a total of 122.7 trillion won ($100.7 billion) in their businesses this year, though most are pessimistic about their growth, a survey by the Federation of Korean Industries (FKI) says.
Some 30 percent of businesses said they plan to reduce their spending, and another 10 percent plan to invest the same amount as last year.
Major portions of their investments will go to facilities. Facilities investment will be pumped up by 7.1 percent year on year to reach 90.9 trillion won, while spending on research and development will be up 0.1 percent from a year earlier to total 31.8 trillion won, the survey found.
The FKI announced last year that the companies plan to spend 125.9 trillion won, but the actual investments only reached 116.6 trillion won. However, the lobbying group said the companies will continue to expand their investments this year even though both local and global markets are slowing down in order to make some positive changes in the local market.
“Despite the weak economic situation, major enterprises will make bold facility investments in fields such as semiconductors, organic light-emitting diodes [OLED] and energy,” the FKI said in a press release on Wednesday.
For example, Samsung Group will invest a total of 15.6 trillion won to build a semiconductor facility in Pyeongtaek, Gyeonggi, by 2018. Hyundai Motor Group will spend 13.3 trillion won to develop environmentally friendly and smart cars by 2018. Read more