Samsung 450 trillion, SK 247 trillion, Hyundai Motor 63 trillion, LG 106 trillion, Lotte 37 trillion
5 major groups' investment over the next 3-5 years totals 903 trillion
Including Hanwha, Doosan, Hyundai Heavy Industries, POSCO, total 1,020.6 trillion
1.6 times this year's national budget... Focused on domestic investment and fostering future growth engines
President Yoon Suk-yeol is saluting the national flag with attendees at the 2022 Korea Small and Medium Business Conference held on the lawn square in front of the Yongsan Presidential Office building in Seoul on the 25th. Attending the event were the heads of the five major conglomerates, including Koo Kwang-mo, Chairman of LG Group; Chey Tae-won, Chairman of SK Group; Lee Jae-yong, Vice Chairman of Samsung Electronics; Chung Eui-sun, Chairman of Hyundai Motor Group; and Shin Dong-bin, Chairman of Lotte Group. (Photo by Yonhap News)
[Asia Economy Reporters Sunmi Park, Hyungil Oh, Donghoon Jung] On the 26th, SK and LG Groups finalized their investment plans for the next five years, revealing that the total investment scale of the five major groups including Samsung, Hyundai Motor, and Lotte amounts to 903 trillion KRW. The number of new hires announced by these groups alone exceeds 260,000, marking an unprecedented scale of investment.
Including POSCO, Hanwha, Hyundai Heavy Industries Group, and Doosan, the total investment by major domestic groups surpasses 1,020.6 trillion KRW. This 1,000 trillion KRW figure is 1.6 times the annual budget of South Korea (607 trillion KRW) and more than half (52%) of the country's Gross Domestic Product (GDP, 1,911 trillion KRW).
This indicates that major conglomerates are all staking their survival on investments to nurture future growth industries ahead of time. It can also be seen as a response to the pro-business stance repeatedly emphasized since the Yoon Suk-yeol administration took office.
According to the business community on the 26th, SK Group announced investment plans focusing on the so-called BBC industries: semiconductors (Chip), batteries (Battery), and bio (Bio) as core growth engines. Judging that semiconductors are the core of the 4th Industrial Revolution, including AI and digital transformation, SK allocated more than half of its total investment, 142 trillion KRW, to semiconductors and semiconductor materials.
Additionally, to achieve the group's goal of reducing 200 million tons of carbon by 2030, which is 1% of the global carbon reduction target (21 billion tons), SK will invest 67 trillion KRW in eco-friendly future industries such as electric vehicle batteries and materials, hydrogen, wind power, and renewable energy. The digital sector will receive 25 trillion KRW, and the bio sector will also receive 12 trillion KRW. An SK Group official said, "We focused on strengthening core growth engines by concentrating 90% of the total investment on BBC," adding, "The main agents of growth will ultimately be talent, so we plan to actively create jobs by hiring 50,000 people."
On the same day, LG Group also announced plans to invest 106 trillion KRW domestically over the next five years, focusing on future growth sectors. In particular, 48 trillion KRW will be concentrated on research and development (R&D). By sector, 43 trillion KRW will be spent on future growth areas. Nearly half of that, 21 trillion KRW, will be focused on R&D in batteries and battery materials, automotive components, next-generation displays, AI and data, bio, and eco-friendly clean tech.
LG plans to directly hire about 10,000 people annually until 2026. Over three years, more than 3,000 hires, accounting for over 10% of total recruitment, will be made in R&D fields such as AI, software, big data, eco-friendly materials, and batteries, centered on new advanced businesses.
POSCO Group also announced on the same day plans to invest 53 trillion KRW globally, including 33 trillion KRW domestically, over the next five years and to directly hire about 25,000 people. Following the launch of POSCO Holdings in March, which marked the first time the group operated under a holding company system, POSCO Group will focus on strengthening competitiveness in core businesses such as ▲green steel ▲eco-friendly future materials including secondary battery materials and hydrogen ▲eco-friendly infrastructure ▲future technology investments, solidifying its position as a leading eco-friendly future materials company. The group plans to contribute more to the development of the domestic economy and industry and actively lead future industrial trends.
In the steel business, about 20 trillion KRW will be invested to further strengthen global competitiveness by establishing electric furnaces and introducing eco-friendly facilities for transitioning to an eco-friendly production system, and enhancing technology for steel products used in electric vehicle motors. Approximately 5.3 trillion KRW will be invested in the ‘eco-friendly future materials’ business sectors such as secondary battery materials and hydrogen for stable raw material procurement, facility expansion, and securing next-generation technologies.
Additionally, about 5 trillion KRW will be invested in ‘eco-friendly infrastructure’ sectors including energy, construction and infrastructure, and food businesses. The group will also invest about 2.7 trillion KRW in venture investments and R&D to discover future businesses and secure new technologies, promoting balanced growth at the group level.
Along with large-scale investments, POSCO Group will also focus on securing talent suitable for nurturing group businesses. By 2026, the group plans to directly hire about 25,000 people in key business areas such as eco-friendly steel production and technology development, secondary battery materials, and hydrogen.
Hyundai Heavy Industries Group also announced on the same day that it will invest a total of 21 trillion KRW over the next five years in eco-friendly transition and digital transformation, which it identified as fields responsible for the group’s future. To build the core foundation that will support the group’s next 50 years and strengthen the competitiveness of its core businesses, 12 trillion KRW will be invested in building smart shipyards that can improve production efficiency and quality, establishing smart construction machinery infrastructure centered on automation and unmanned technology development in the construction sector, and investing in smart energy businesses.
A total of 7 trillion KRW will be invested in eco-friendly R&D. In the shipbuilding sector, the group plans to build a hydrogen transport value chain including eco-friendly ship materials, carbon capture technology, and hydrogen and ammonia-powered ships. In the construction machinery sector, it will focus on developing battery-based machinery equipment, and in the energy business, it will concentrate on carbon reduction technology and eco-friendly bio technology development.
A Hyundai Heavy Industries Group official said, "Eco-friendly and digital transformation are core goals for the group’s future," adding, "We plan to concentrate all our capabilities on nurturing key talent and technology development."
Earlier on the 24th, Samsung, Hyundai Motor, and Lotte Group also simultaneously announced their investment plans for the next 3 to 5 years. Samsung will invest 450 trillion KRW over the next five years in future food sources and new growth IT sectors. This is an increase of 120 trillion KRW, or more than 30%, compared to the previous five-year investment of 330 trillion KRW.
Domestic investment will increase by 110 trillion KRW, or more than 40%, from 250 trillion KRW to 360 trillion KRW. Investment areas include future new businesses such as ▲semiconductors ▲bio ▲AI and 6G (next-generation communication).
Samsung plans to hire 80,000 new employees over the next five years. The company intends to expand recruitment centered on core businesses such as semiconductors and bio, which are foundational technologies of the 4th Industrial Revolution, contributing to the creation of good jobs. This large-scale investment is known to be driven by Vice Chairman Lee Jae-yong’s determination. Lee has emphasized that through more investment and better job creation, he will inject dynamism into society as a whole and meet public expectations.
Chairman Chey Tae-won of the Korea Chamber of Commerce and Industry is giving a presentation on the Entrepreneurial Spirit Council (ERT) at the Entrepreneurial Spirit Declaration Ceremony held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, on the morning of the 24th. Photo by Kim Hyun-min kimhyun81@
Hyundai Motor Group plans to invest 63 trillion KRW domestically by 2025 for electrification and eco-friendly initiatives, new technologies and businesses, and strengthening existing business competitiveness. The group will focus on advancing electrification and eco-friendly businesses, which are core pillars of future growth. Hyundai Motor, Kia, and Mobis will invest a total of 16.2 trillion KRW in this sector. Through this investment, the group aims to secure technological superiority across all electrification and eco-friendly fields, including pure electric vehicles, hydrogen fuel cell vehicles, and plug-in hybrids.
To systematically promote future new technologies and businesses such as robotics, Advanced Air Mobility (AAM), connectivity, autonomous driving, mobility services, and artificial intelligence (AI), 8.9 trillion KRW will be invested. Additionally, 38 trillion KRW will be invested in existing areas such as advanced research, vehicle performance, and improving the product competitiveness and customer service of internal combustion engine vehicles.
Lotte Group will concentrate a total of 37 trillion KRW over five years in core industries including chemicals, food, and infrastructure, as well as new growth themes such as Health & Wellness (HW), mobility, and sustainability. In the HW sector, Lotte, preparing to enter the bio-pharmaceutical CDMO business, plans to build a domestic factory worth about 1 trillion KRW following overseas factory acquisitions. Lotte Chemical will invest more than 1.6 trillion KRW over five years in hydrogen and battery materials businesses. The group will also invest 7.8 trillion KRW in facility investments and production expansions to strengthen competitiveness in high-value specialty businesses and general petrochemical businesses. The distribution business group will invest 8.1 trillion KRW.
Hanwha Group and Doosan also finalized and announced their investment plans for the next five years on the 24th and 25th. Hanwha Group will invest a total of 37.6 trillion KRW, including 20 trillion KRW in domestic industries such as energy, carbon neutrality, defense, and aerospace, which are future industrial sectors. Notably, the 20 trillion KRW domestic investment matches the scale Hanwha Group has invested domestically and internationally over the past five years. Doosan Group announced plans to invest 5 trillion KRW over the next five years in next-generation energy businesses such as small modular reactors (SMR), gas turbines, and hydrogen fuel cells, aiming to revitalize the domestic energy industry ecosystem including nuclear power.
The simultaneous large-scale investments by major conglomerates are interpreted as a proactive support for the Yoon Suk-yeol administration’s core economic policy of ‘private sector-led growth.’ A notable feature is the emphasis on domestic investment. Since the launch of the Yoon administration, a business-friendly environment has been created, and the expansion of domestic employment and investment is seen as a response to this favorable climate.
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