South Korea’s foreign direct investment (FDI) hit an all-time high last year as the Korean Inc. sought global push through mergers and acquisitions (M&As) and better manufacturing environment overseas.
The Ministry of Economy and Finance announced Friday that overseas investments by Korean firms in 2018 rose 11.8 percent from the previous year to $49.78 billion, the highest since 1980 when the data began to be tracked.
The figure was on the increase for four years in a row following gains of 6.3 percent in 2015, 30.4 percent in 2016, and 12.6 percent in 2017. Investments made in the manufacturing industry accounted for the largest share of 32.9 percent, followed by financial and insurance sector with 32.6 percent, real estate 10.2 percent, wholesale and retail 4.9 percent and mining 4.3 percent.
The biggest share of FDI by Korean businesses went to Asia at 34.1 percent, trailed by Europe at 23.5 percent, North America 22.8 percent, Central and South America 16.3 percent, Middle East 1.7 percent, Oceania 1.3 percent and Africa 0.3 percent.
By nation, the U.S. took up the largest 21.7 percent share in offshore investment by Korean firms. The Cayman Islands came in second with 12.4 percent, China 9.6 percent, Hong Kong 7.0 percent and Vietnam 6.4 percent.
SK Hynix Inc.’s investment in a Korea-U.S.-Japan alliance that acquired Toshiba Corp.’s memory business unit last year contributed to pushing the figure to a new high, the finance ministry explained. The country’s second biggest chip maker invested about 4 trillion won ($3.53 billion) in a special purpose company (SPC) in the Cayman Islands for the acquisition.
FDI by Korean companies in the fourth quarter ended December last year amounted to $13.23 billion, up 30.7 percent from a year ago but down 2.4 percent from the previous quarter. Financial and insurance industry accounted for the largest share of 36.8 percent, followed by manufacturing sector with 28.8 percent, property 8.7 percent, wholesale and retail 5.9 percent and mining 5.1 percent.
By Lim Sung-hyun and Choi Mira
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