Last Year, Large Corporations Invested 5.5 Trillion KRW in Overseas Subsidiaries... 50.2% Decrease Compared to Previous Year

CEO Score Survey of 284 Companies... Decline in Automobile and Parts Sectors
Affiliate Investments Down 51.7%, Overseas Subsidiary Investments Down 31.3%

The amount invested in overseas subsidiaries by the top 500 domestic companies last year was recorded as half of the previous year. The number of companies with overseas subsidiary investments exceeding 1 trillion won decreased from two in 2022 (Hyundai Motor Company, SK On) to one last year (LG Energy Solution). The automotive and parts industries saw the largest decline in investment amounts.

Employees at the first factory of Ultium Cells, the North American joint venture between LG Energy Solution and GM, are producing batteries.
[Photo by LG Energy Solution]

According to CEO Score, a corporate data research institute, on the 26th, an investigation into overseas subsidiary investments was conducted on 284 companies (excluding financial firms) among the top 500 companies for which year-on-year comparisons were possible. Last year, the total overseas subsidiary investment by these companies was 5.4786 trillion won, a 50.2% decrease compared to the previous year (10.9974 trillion won). During the same period, the number of investing companies decreased by 24.8%, from 258 to 194.

By industry, the IT and electrical electronics sector had the highest investment amount at 2.1219 trillion won (25 companies). This was followed by petrochemicals at 873.8 billion won (20 companies), services at 568.2 billion won (30 companies), shipbuilding, machinery, and equipment at 513.1 billion won (21 companies), and holding companies at 412.3 billion won (4 companies).

The industry with the largest decrease in overseas subsidiary investment was automotive and parts (down by 2.2629 trillion won). Hyundai Motor Group affiliates such as Hyundai Motor Company, Kia, and Hyundai Mobis invested over 2 trillion won in 2022, but last year, investments decreased as they focused on capital increases in existing overseas affiliates. Investments also declined in petrochemicals (1.1261 trillion won), services (1.0016 trillion won), construction and building materials (754.9 billion won), steel (638.4 billion won), and consumer goods (581.2 billion won).

Specifically, the total investment amount in overseas corporations that are not affiliates decreased by 31.3%, from 2.2172 trillion won in 2022 to 1.5224 trillion won in 2023. The number of investing companies also dropped by 31.7%, from 145 to 99. Investments through the establishment of overseas affiliates decreased by 51.7%, from 7.984 trillion won in 2022 to 3.8535 trillion won in 2023, with the number of investing companies falling from 100 to 87. Overseas company acquisitions saw the largest decline, dropping 87.1% from 796.3 billion won in 2022 to 102.7 billion won in 2023. The number of investing companies decreased from 13 to 8.

By company, LG Energy Solution (1.186 trillion won) was the only one to exceed 1 trillion won. Following were SK On (851.8 billion won), Hanwha Solutions (438.8 billion won), Hanwha Aerospace (429.3 billion won), SK Telecom (329.1 billion won), SK (316.2 billion won), POSCO Holdings (293.4 billion won), Krafton (206.9 billion won), EcoPro BM (155.4 billion won), and SK Innovation (119 billion won). Krafton invested in the most overseas subsidiaries last year, with 15 companies.

LG Energy Solution invested in five companies, including NextStar Energy (579.1 billion won), a joint venture with Stellantis, and 'L-H Battery Company' (549 billion won), a joint venture with Honda. The investment scale increased by 944% compared to the previous year (113.6 billion won). Since its spin-off from LG Chem in December 2020, LG Energy Solution has been continuously expanding its overseas business. SK On's investment amount last year decreased by 206.4 billion won compared to the previous year (1.0582 trillion won). Of SK On's 851.8 billion won investment, 848.5 billion won (99.6%) was invested in Route On Delaware, established last year.

Hanwha Solutions and Hanwha Aerospace jointly invested 50% each to establish Hanwha Futureproof in March last year, ranking third and fourth in investment amounts.