.Daewoo Corporation, for example, is by far the largest foreign investor in Vietnam with projects worth more than $700 million
."Normally Daewoo is very strong to go into new markets before the other competitors," said Kim Kyung Won, general director of Daeha Company Ltd., which built a $177 million commercial, residential and hotel complex in Hanoi. "If we invest later in Vietnam, the competition will be very severe," he says.
.Others are thinking along the same lines. LG Group has plans to spend several billion dollars in Vietnam, targeting everything from life insurance to oil refining. Hyundai Corporation has set up joint ventures in shipbuilding and steelmaking, and its construction arm has won several big deals, including building an offshore gas pipeline. Ssangyong Industrial Cement Corp. recently signed an agreement to build a $250 million cement plant
.Propelled by rising costs and limited growth prospects at home and attracted by Vietnam's cheap labor, Korean conglomerates have poured into the country in the past few years, seemingly undaunted by problems that have kept other investors out.
.Since South Korea and Vietnam established diplomatic ties in 1992 investment by Korean companies has surged from $109 million to $1.987 billion in approved projects at the end of June, making South Korea the fourth largest investor after Taiwan, Japan and Hong Kong. South Korea is Vietnam's third largest trading partner, with $1.3 billion in two-way trade.
.How long the Koreans will have to wait before their investments pay off is uncertain, but executives say they can afford to wait.
.The Hanoi representative office general manager of Pohang Iron and Steel Co., Oh Jin Su, said no one should expect a quick return in Vietnam. "We are seeing that U.S. companies are focusing on short-term profits because of shareholder concerns. Korea is a little different. It was traditional that [conglomerates] were not so much profit-oriented."
.Observers say that in their aggressive worldwide expansion, Korean conglomerates see Vietnam, a country with a tattered infrastructure, as one of the last places in the region where they can beat the Japanese.
."They seem to want to make Vietnam a strategic move, a place where the chaebol thought they could get a leg up on the Japenese, but by being faster they can get to places where the Japanese ordinarily establish themselves," said a Ho Chi Minh City-based U.S. lawyer.
.So far, the pie isn't even big enough to share among themselves, says Kang Hoon Chee, executive director of Samsung Corp.'s representative office in Hanoi. Group annual turnover from trading activities in coal, petrochemicals, steel and fertilizer have stagnated at about $120 million. "We came here first, but now lots of other Korean companies are coming and competing with each other, so there is not a lot of profit," he said.
.Frederik Balfour is a Hanoi-based correspondent for AFX.