Investment of South Korean firms drops in 2018

Investment by major South Korean business groups decreased about 3% last year from a year earlier amid contracting demand at home and abroad, data showed Sunday.

According to the data by corporate tracker CEO Score, 855 companies affiliated with the country’s top 60 conglomerates made investments in facilities, real estate and intangible assets worth a combined 98.5 trillion won ($86.6 billion) in 2018.

The 2018 tally marked a 3.1% drop from the previous year’s 101.6 trillion won.

Samsung Group, the largest business group by asset in South Korea, cut its investment by 25.7%, or 9.9 trillion won, to 28.5 trillion won last year.

No. 2 Hyundai Motor Group also reduced investment 6.9% last year, while investment by Amore Pacific, a leading cosmetics firms, was more than halved.

On the other hand, SK Group, the third-largest business group, increased investment by 48.5% to 21.2 trillion won last year on its massive project to build semiconductor production lines for SK hynix Inc. in the country.

LG Group also spent 14.1 trillion won to expand its battery and display plants last year, up 22.7% from a year earlier.

The South Korean economy has been struggling with falling corporate investment amid clear signs of an economic slowdown.

Separate central bank data showed that Asia’s fourth-largest economy saw its facility investment drop 1.6% on-year, marking the largest decline since 2009.

It plunged from a 14.6 percent jump in 2017 when chipmaking companies like Samsung Electronics Co. expanded their facilities to meet booming global demand for chips.

Source from: The Peninsula