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Business

Samsung Electronics on Vietnam hiring binge

Samsung Electronics plans to expand production at its plant in Bac Ninh Province, in northern Vietnam.

HANOI -- Samsung Electronics plans to hire 60,000 workers in Vietnam by July, bringing its number of local employees to around 100,000, more than any other foreign company.

     The company currently has 84,000 workers on its payroll in the Southeast Asian country. The new employment plan, which takes into account attrition and retirement, comes as the electronics giant is looking to expand production and facilities at its plants in Bac Ninh and Thai Nguyen provinces in northern Vietnam.

     Most of the new hires will be female factory workers, but Samsung is also looking to take on engineers, as well as recent graduates for possible executive-track positions. The company has already started recruiting extensively, and the first group of 2,500 additional workers is slated to join by the end of March.

     Samsung started production in Vietnam at its plant in Bac Ninh, east of Hanoi, in 2009. The plant currently produces smartphones, conventional mobile phones and parts for both, and the company plans to build new facilities for producing displays.

     In Thai Nguyen, north of Hanoi, Samsung plans to build a second plant, adjacent to the factory it built there in 2014. The company is expected to produce a wide range of products, including notebook computers, digital cameras and smart TVs, in the province.

     Wages at Samsung are higher than average for factory workers in Vietnam, according to local press and other sources. The company also offers opportunities for employees to learn English and accounting skills.

    But it has become more difficult for manufacturers in Vietnam to find workers. As labor expenses in China rise, more companies are building plants in the Southeast Asian nation, and workers in Vietnam tend to change jobs relatively often.

     At the same time, the Vietnamese economy has been growing more reliant on Samsung. In 2014, Samsung group companies ranked first, second and fourth in terms of new foreign direct investment projects in the country.

     In addition, Samsung accounts for nearly 20% of Vietnam's exports by value. The country could incur its first trade deficit in four years in 2015 if sales of Samsung smartphones slow.

Dependence and dissatisfaction

The biggest foreign direct investment project in Vietnam in 2014 was Samsung's $3 billion construction of its second plant in Thai Nguyen, according to the Foreign Investment Agency. The figure represents about half of total South Korean foreign direct investment in Vietnam last year.

     As its dependence on Samsung increases, Vietnam is growing more dissatisfied with the company's local content ratio. Samsung procures some parts from Vietnamese suppliers, but as of last autumn, 80% of the components used in its products came from South Korean companies.

     Critics say the Vietnamese government has done too much for Samsung, granting it tax exemptions and reductions for more than 10 years and providing subsidies for employee education programs.

     An official at a Vietnamese financial institution said the government's preferential treatment of Samsung is so generous that it might seem unfair from the viewpoint of other companies.

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