Top 10 business groups trim their investmentsKorea’s top 10 business groups invested less than planned in 2012 as they pushed back spending due to the protracted euro zone crisis and a slowdown in the U.S. economy, data showed yesterday.
Combined investments by Samsung, Hyundai Motor, SK, LG and six other business groups reached 116.12 trillion won ($107 billion) last year, according to data compiled by Yonhap News Agency. The amount covers facility investments as well as research and development outlays.
The figure is lower than the 121.51 trillion won worth of investments pledged by the conglomerates last year, the data showed.
Samsung Group, the nation’s top conglomerate that has tech powerhouse Samsung Electronics under its wing, spent a hefty 47.8 trillion won last year, but the amount was 1 trillion won less than planned, as Samsung Electronics, the world’s largest smartphone maker, adjusted its actual spending on chipmaking and flat-panel production.
Posco, the country’s leading steelmaker, spent 7.2 trillion won last year, also 1.2 trillion won less than planned, as the world’s fourth-largest steel mill postponed facility upgrades and expansion, the data also showed.
SK Group, which has the country’s leading mobile carrier SK Telecom and leading refiner SK Innovation under its wing, spent 15.5 trillion won last year, 2.1 trillion won less than planned, and Hanwha Group also cut back spending by 400 billion won to 1.5 trillion won.
On the other hand, LG, Hyundai Motor and Hyundai Heavy Industries implemented outlays as planned.
Capital spending by LG Group, which owns LG Electronics and LG Display, reached 16.4 trillion won last year, 400 billion won more than expected, as the two tech giants increased spending on new product development, the data showed.
Hyundai Motor Group, led by leading automaker Hyundai Motor and its smaller affiliate Kia Motors, carried out its planned spending of 14.1 trillion won last year, and Hyundai Heavy Industries, the country’s top shipbuilder, spent 2.4 trillion won last year planned.
“Last year, the corporate sector faced a slew of uncertainties, which forced the suspension or delay of planned spending,” said an official at the Federation of Korean Industries, the lobby for the country’s large businesses.
Korea’s economy, Asia’s fourth-largest, grew 2 percent last year, the slowest growth in three years, the central bank said earlier. It also cut its growth outlook for 2013 to 2.8 percent from 3.2 percent amid worries that exports could get hurt by cloudy external market conditions.
Industry watchers said the country’s major companies may cut back on their new investments and workforces this year, and take other belt-tightening measures.