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South Korea's Taekwang to expand business scope

Released at: 05:51, 11/06/2017

South Korea's Taekwang to expand business scope

Photo: Taekwang

Company to move into industrial complex construction, power plants, and logistics, according to South Korean media report.

by Quang Nguyen

Taekwang Co., a first-generation South Korean company that successfully entered Vietnam with the contract manufacturing of Nike footwear, is expanding its business to include industrial complex construction, power plants, and logistics in the Southeast Asian country, South Korea’s Pulse News reports.

The company said it is building an industrial complex around a dyeing plant currently being constructed at the Moc Bai Border Gate Economic Zone in southern Tay Ninh province, nearby Ho Chi Minh City. 

Mr. Park Yeon-cha, Chairman of the Taekwang Group, said the company has a blueprint to build a power plant and launch logistics services after building the industrial complex. 

The complex covers 1.32 million sq m in total, including 1.08 million sq m for an industrial park and 240,000 sq m of commercial land. 

It will also be equipped with an industrial water processing facility capable of treating 20,000 tons a day and a tap water system supplying 3,000 tons of water daily, together with high-speed internet. The company will begin public subscriptions for the complex from next month. 

The Vietnamese Government is said to be offering attractive tax breaks to tenants at the complex.

While Vietnam levies a 20 per cent corporate income tax, companies at the complex will be exempt from corporate taxes for four years. The rate will be 5 per cent for the following nine years and then 10 per cent for another two years. Personal income tax rates will also be cut by 50 per cent. 

The company also plans to build a 2,400 MW thermal power plant in northern Nam Dinh province. The government will reportedly issue a license to Taekwang in the near future. 

Image: Taekwang

The company is also seeking to acquire Gemadept, the country’s largest logistics company. The acquisition could be a bridgehead for the South Korean company to build a comprehensive logistics network that covers neighboring countries like Cambodia and Laos.

Taekwang entered Vietnam in 1994 with the establishment of shoemaker Taekwang Vina. The group has since developed factories and projects in the fertilizer, petrochemical, and thermal power industries.

Gemadept, meanwhile, is listed on the Ho Chi Minh Stock Exchange, with State ownership standing at 8.7 per cent and foreign ownership 21 per cent.

Its share price increased strongly over the month before information emerged that it is likely to divest from subsidiaries in the logistics field and intends to purchase 15 per cent of Gemadept Tower.

In 2014, Gemadept sold 85 per cent of Gemadept Tower to South Korea’s CJ Group. At a price of VND41,900 ($1.85) per share, Gemadept’s market capitalization stands at over VND7.518 trillion ($331.4 million).

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