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Samsung and LG plan additional billions of dollars in investment in Vietnam

HANOI (Reuters) – The Vietnamese government said on Tuesday that South Korean electronics giants Samsung and LG plan to make billions of dollars in additional investment in Vietnam.

The announcement comes after Samsung cut smartphone production in Vietnam twice this year in response to weak global demand.

Samsung Electronics, the largest single foreign investor in Vietnam, will raise its total investment in the country to $20 billion from $18 billion, the government said in a statement.

The company declined to comment on the investment. A source familiar with the matter said on Tuesday that the investment would be completed by the end of this year.

Samsung years ago produced about half of its smartphones in Vietnam and they account for nearly a fifth of the country’s total exports.

The additional investment will cement Vietnam as a major production location for Samsung, the government said, following a meeting Tuesday in Seoul between Vietnamese President Nguyen Xuan Phuc and company CEO Han Jong He.

The Vietnamese government said in a separate statement that LG will also invest another $4 billion in the country to make it a center for smartphone camera production.

LG, which has so far invested $5.3 billion in Vietnam to make products such as home electronics, cameras and auto parts, did not immediately respond to a request for comment.

The announcements came as Vietnam and South Korea said on Monday they had developed their relations into a “comprehensive strategic partnership,” which Vietnam has so far only established with China, Russia and India.

The two countries aim to increase bilateral trade to $100 billion next year, and to $150 billion annually by 2030, up from $78 billion last year.

Vietnam has emerged over the past decade as one of the most attractive production centers for electronics companies, but weak global demand has cut production this year.

(Reporting by Khanh Pho; Additional reporting by Joyce Lee in Seoul; Editing by Francesco Guaracio, Kanupriya Kapoor)