Samsung to Hike Investment 15.2 Pct to 21.2 Tln Won
- 12.3 tln won in facilities, 6.1 tln won in R&D projects under attack investment plan

Samsung Group has decided to invest 21.2 trillion won next year, up 15.2 percent from this year and the largest amount in its history, Lee Kun-hee, chairman of the largest business group said on Dec. 28. The group broke the $50 billion mark in exports this year, the largest in its history.
The investment breaks down to 12.3 trillion won in facilities, up 13 percent and 6.1 trillion won in R&D projects, up 20 percent from this year.
The chairman said the group decided to increase the investment, despite tough business conditions next year including the foreign exchange rates, oil prices and the IT business trends. Group Chairman Lee urged that investment should be increased during difficult times to enhance the groups global competitive edge under what seems to be an attack investment plan.
Vice Chairman Lee Hak-soo said the investment plan has been drawn up under the assumption that the won-dollar exchange rate would average around 1,050 won per dollar next year. He projected that the groups sales would be up 3 percent next year from this year at 139.5 trillion won.
The groups sales this year amounted to 135.5 trillion won, up 12.4 percent from 2003 with the operating profit totaling 19 trillion won, up 84.4 percent, breaking records in both accounts.
But the group projected lower operating profit next year at 14.6 trillion won, down 23.1 percent from this year on account of reductions in the price of its major products such as LCD and the appreciation of the Korean won.
The vice chairman projected exports next year would amount to $59.2 billion, up 12.3 percent from this year, which saw the groups exports reaching record $52.7 billion, up 38 percent from the previous year, breaking the $50 billion mark for the first time. The groups exports accounted for 21 percent of the countrys total exports this year.
The vice chairman said the group was able to achieve record best performance results since the groups launching this year due to continued investment under its steady long-term management plan not deterred by short-term business trends. He said the group will again on the attacking posture to expand the world market shares of some of its world-famous products such as semiconductor chips, LCD and IT products under a plan to make the group first-rate global business group.
He said only 9 companies in the world recorded pre-tax profits over $10 billion including only one manufacturer, Toyota Motors and Samsung registered $10 billion in pre-tax profit this year, a record performance.
With regard to voices that call for Chairman Lee to become chairman of the Federation of Korea Industries, the Samsung official said the chairman has a lot of work to do for the group as it still has some ways to go to be a first-rate global business group.
"He could do more for the country by remaining with Samsung than taking over the helm of the FKI," said the vice chairman.
He said becoming a top-rated firm in the world means being ranked from third to fifth place with best financial structures.
On arguments on Samsung Everland becoming a financial holding company, he said it has legally become one, although not intended to, and so many studies are being made to change the situation by diversifying its assets within the legal means. One of the ways under consideration is to have Korea First Bank to manage its stakes in Samsung Life under the banks trust account.
On amended Fair Trade Law to limit voting rights of financial holding companies, he said various studies should be made on provisions dealing with risks of mergers and acquisitions. He said Samsung has neither plans nor considered building a business city as reports indicated.
On making investment in North Korea, the vice chairman said foreign shareholders would not understand Samsung making investment in the North just because North Koreans are Koreans the same as we are at this stage, although helping North Korea is all right.
But he said if given conditions are equal, it would be right for Samsung to make investment in the North, adding that he is thinking along the line of putting money down in assembly facilities for white home appliances if chances are created in the future.
On the role of the FKI, he said member firms hold too high hopes on the economic association that they created to help their management creating many problems, although no trouble would occur if they dont expect too much from the business organization.
Samsung is often misunderstood over its relations with the FKI, although its relations have been in general nature only.
He said the group plans to donate from $100,000 to $300,000 to each country that has been hit by tidal waves and many people killed with huge damage, along with medical aid units. nw