The Korea Herald

피터빈트

Investment by 600 major firms to hit record high in 2012

By Kim Yon-se

Published : May 8, 2012 - 19:08

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The combined investment of the nation’s 600 major enterprises is projected to reach an all-time high this year despite uncertainties surrounding the business environment at home and abroad.

According to a survey by the Federation of Korean Industries, local enterprises including Samsung Electronics and Hyundai Motor plan to invest 140.7 trillion won ($124.5 billion) ― the largest scale in history ― in 2012, up 12.1 percent a year earlier.

“The survey shows that uncertainties like the eurozone debt crisis and the nation’s presidential election this December do not undermine their investment sentiment,” the FKI said.

To enhance potential competitiveness via “preemptive investment,” it seems that many of the 600 enterprises have become more active in pouring money into two major sectors ― facilities and the research & development, the federation said.

Their plan of investment in the R&D sector is projected to post a growth rate of 16.9 percent on a year-on-year basis ― from 23.9 trillion won in 2011 to 28 trillion won in 2012.

The estimated growth of their combined investment in facilities comes to 10.9 percent.

As a noteworthy sector, auto parts producers will see their investment in R&D and facilities increase by 14.9 percent, buoyed by mass production of eco-friendly vehicles and the free trade agreements with the European Union and the United States.

Earlier, Hyundai Motor Group set a record-high budget with its 2012 investment in two major sectors.

The automotive group, which holds units like Hyundai Motor, Kia Motors and Hyundai Mobis, said its investment target for this year comes to 14.1 trillion won, up 15.6 percent from its 2011 investment.

Of the 14.1 trillion won investment, 5.1 trillion won will be used for the R&D sector and the remaining 9 trillion won will be allocated to facilities development, the group said.

Its investment in the R&D sector will mostly be focused on development of futuristic cars, such as eco-friendly hybrids and electric vehicles.

In particular, more than 80 percent will be invested at home under its business policy to boost the domestic demand.

A Hyundai Motor spokesman stressed that development of eco-friendly cars will be the group’s core investment target.

Following the sales of Hyundai’s Sonata hybrid and Kia’s K5 hybrid in 2011, the group is aiming to launch a variety of hybrid models over the next few years.

The group plans to carry out role-sharing between Hyundai Motor and its affiliate Kia Motors in developing eco-friendly cars.

By Kim Yon-se (kys@heraldcorp.com)