Cos. to Funnel a Record High 113 Tln Won into Investments
FKI unveils its 2011 investment plans during a meeting with President Lee
The nation¡¯s top 30 conglomerates, including Samsung Group and Hyundai-Kia Automotive Group, SK Group and LG Group, plan to pour a record high 113.2 trillion won into combined investments during this year. The heads of the conglomerates unveiled this grandiose investment plan at a meeting aimed at boosting exports, investments and jobs at the Federation of Korean Industries (FKI) building in Yeouido, Seoul, on Jan. 24 at which President Lee Myung-bak was in attendance.
The FKI member companies¡¯ plan to invest 113.2 trillion won in 2011, up 12.2 percent over the 2010 investment of 100.8 trillion won, can be construed as their determination to aggressively make forays into foreign markets. In particular, the top 30 conglomerates plan to set aside 26.3 trillion won in R&D outlays during 2011, representing a 26.6 percent surge over last year, and create 118,000 new jobs.
President Lee and the tycoons discussed such issues as ways of boosting investments and jobs and pursuing shared growth between large-sized companies and SMEs. President Lee promised government support for shared growth and other issues by demonstrating a sign of more intimacy with conglomerates than ever before. President Lee was the first Korean president to visit the FKI and hold such a gathering with its members since its establishment in 1961. Previous meetings took place at Cheong Wa Dae by invitation of the president. Among the participants of the meeting were Samsung Group Chairman Lee Kun-hee, Hyundai-Kia Automotive Group Chairman Chung Mong-koo, SK Group Chairman Chey Tae-won and LG Group Chairman Koo Bon-moo.
President Lee said, ¡°More high-caliber manpower is needed to boost companies¡¯ exports and investments, so the government plans to aggressively provide support to help them establish R&D centers in Seoul and its metropolitan area.¡±
In return, Samsung Group Chairman Lee said, ¡°More efforts will be extended to give vigor to the national economy through a boost in investments, jobs and exports on the part of conglomerates, and particularly, the president has laid out enough of an institutional foundation and infrastructure for shared growth, so large-scale companies and SMEs now have to make joint efforts to help it take root in the field.¡±
President Lee pledged to provide government support to companies¡¯ plans to establish R&D centers in Seoul and its metropolitan area. Citing the need for attracting high-quality manpower and strengthening global competition, companies have favored the establishment of R&D centers in Seoul and its metropolitan area and demanded the relaxation of restrictions related to the matter. The reality is that high-caliber employees are reluctant to move to provincial districts because of residence and the education of their children instead of higher compensation conditions. For instance, Samsung Electronics has rescinded a plan to relocate its design staff from its headquarters in Seocho-dong, Seoul, to Suwon.
A stumbling block that stands in the way of the realization of the issue is how to mitigate strong opposition from local governments against the relocation of conglomerates¡¯ R&D centers from provincial districts to the capital and its adjacent area.
The top four groups account for 86.6 trillion won or 76.5 percent of the total investment amount that the top 30 companies promised to invest during this year. In particular, Samsung Group is at the top with a plan to set aside 34 trillion won, 38 percent of the total investment amount, followed by LG Group with plans to invest 21 trillion won. Next are Hyundai-Kia Automotive Group and SK Group, which plan to invest 12 trillion won and 10.5 trillion won, respectively. The top 30 companies plan to concentrate their investments into new growth engine areas as well as steel, semiconductor, display, energy, power generation, transportation, info-tech and tourism. The conglomerates¡¯ R&D investments for this year are extraordinary. The top 30 companies decided to invest 26.3 trillion won in R&D outlays during 2011, a 26.6 percent jump over the previous year. nw
President Lee Myung-bak exchanges views with tycoons at the Federation of Korean Industries (FKI) building in Yeouido, Seoul, on Jan. 24.