Ho Chi Minh City authorities approved construction on South Korean electronics giant Samsung's third factory in Vietnam with the total investment of over US$1 billion.
The plant will be established at the Saigon Hi-Tech Park in District 9, Tuoi Tre (Youth) newspaper quoted Le Manh Ha, vice chairman of HCMC People’s Committee as saying on Thursday.
An unnamed official at the Ministry of Planning and Investment told the newspaper that Samsung’s latest plant will be designated for the production of LCD screens and relevant components.
He said that in order to be eligible for preferences like tax-breaks and land rentals as stipulated in Vietnam’s Law on High-tech Technology, Samsung has made several commitments--including the construction of a research and development center in HCMC.
Samsung also agreed to spend at least 1 percent of its annual income on R&D activities for three years after plant goes into operation, and increase that rate to over 1 percent in its fourth year, the newspaper reported.
Under the agreement, at least 60 percent of Samsung’s annual revenues will have to come from its hi-tech products during the factory's first three years of operation--though that rate must rise to 70 percent in its fourth year.
Samsung opened its first factory in Vietnam in 2009 in the northern province of Bac Ninh with an initial investment of $670 million that was later adjusted upwards to $2.5 billion.
Last March, it started building another northern factory in Thai Nguyen Province with an investment of $2 billion.
Both of the factories are expected to export $35 billion worth of Samsung cell phones this year, Tuoi Tre reported.
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