Big business to spend despite slump

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Big business to spend despite slump

Most of Korea’s top 10 family-oriented business conglomerates plan to increase their spending on new plants and equipment next year, despite concern over the continued global economic slump, a poll showed yesterday.

According to the survey by Yonhap News Agency, leading conglomerate Samsung Group and five business groups intend to increase their investment in 2012, with three others moving to cut back on their capital spending.

Although Samsung has yet to finalize its investment for the coming year, the group said it will push for “aggressive investment,” spending more than this year.

Samsung had planned to spend a record 43 trillion won ($37.4 billion) on facility investments in 2011, up 18 percent from the previous year.

The group, which has tech behemoth Samsung Electronics under its wing, is widely expected to spend big on the upgrading of its semiconductor and liquid crystal display lines as well as its health care business.

Hyundai Motor Group also plans to increase its capital spending next year, but will not seek excessive expansion due to an expected drop in demand.

The world’s fifth-largest automaker splurged 11.8 trillion won this year on facility investment.

Hyundai Motor Group is projected to inject large sums into the development of eco-friendly vehicles and the construction of plants in China and Brazil.

SK Group, which recently agreed to buy Hynix Semiconductor, is forecast to invest more than 15 trillion won in the coming year, up over 50 percent from this year.

In November, SK Telecom, the group’s flagship, agreed with eight creditors of Hynix led by Korea Exchange Bank to pay 3.43 trillion won for a 21.05 percent stake in the chipmaker.

Three other business groups - Lotte, GS and Hanwha - are also expected to increase their capital expenditures in a bid to tap overseas markets and boost their competitiveness.

In contrast, LG Group, top steelmaker Posco and Hanjin Group will likely reduce their capital expenditures next year amid growing global uncertainties, according to the findings.

Yonhap

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