July 06, 2018 12:17
President Moo Jae-in will cut the ribbon on a new Samsung smartphone plant in India next Monday while he is there for a state visit, Cheong Wa Dae said Thursday.
Samsung chief Lee Jae-yong is also scheduled to attend the opening in Uttar Praesh in northern India. This will be Moon's first meeting with Lee, who epitomizes big business collusion with the government of his predecessor Park Geun-hye and is serving a suspended sentence for corruption.
Lee has spent most of his time since being sprung from jail in February overseas, in Canada, China, Europe and Japan. He met Indian Prime Minister Narendra Modi in September 2016 and explained Samsung's plans to make phones in India.
The Korean conglomerate has invested around W800 billion to double the smartphone output of its existing plant in Uttar Pradesh, while the new factory there will begin operations in the second half of this year (US$1=W1,119).
A Cheong Wa Dae official told reporters Thursday, "At present, Samsung is the No. 1 player in the Indian smartphone market, but it is competing fiercely with Chinese rivals for the top spot. A Korean company was the first to enter the Indian market but is facing a tremendous threat from Chinese and Japanese rivals, which are making massive investments."
Asked if it is appropriate for a convicted criminal to participate in an event attended by the president, the official said, "Why not? Please don't put too much political significance on this."
Industry watchers believe Moon's visit to the Samsung plant could serve as a watershed in shifting his administration to a more corporate-friendly position.
The president has recently been stressing the need for dialogue with business and made a point of visiting factories. But the government and ruling party continue to come down hard on conglomerates using prosecutors, the Fair Trade Commission and the Financial Supervisory Service to root out malpractice and bad behavior by the owner families.
Civic groups and labor unions constitute the core of Moon's support base, and they continue to target Samsung.
Samsung's plant in Uttar Pradesh is important for bilateral relations. Modi wants Korean businesses to become partners in India's economic development, and India plays a major role in Samsung's IT business strategy in South Asia.
Modi attended the Korea-India Business Summit hosted by the Chosun Ilbo in New Delhi in February and invited Korean businesses to invest in his country, which aims to become a global manufacturing hub.
Samsung originally envisioned a W320 billion investment but increased the amount to W800 billion to counter the onslaught of Chinese rivals.
Once the new factory goes into operation, Samsung's smartphone output capacity will rise from 5 million a month to 10 million.
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