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LG Electronics is looking to sell its smartphone plants. Source: Glassdoor

After announcing to withdraw from the smartphone business, LG Electronics is closing down production plants in Haiphong (Vietnam), Taubate (Brazil), and Qingdao (China) after failing to effect a breakthrough, according to Business Korea .

Of these, the Haiphong plant, which is the largest among LG Electronics’ smartphone plants with an annual capacity of about 10 million smartphones, equaling about half of LG’s total smartphone output, has been announced to find a buyer at the selling price of KRW100 billion ($90 million). Realising the difficulties of finding a local buyer, which is going to manufacture almost 10 million smartphones per year, LG Electronics is considering selling the plant site only, without the production lines.

The Taubate and Qingdao plants are facing the same difficulties. They have a total capacity of about 8-9 million smartphones a year. After a rumour about the sale of the Taubate plant caught wind at the end of February, executives and employees at the plant have been staging a strike since March 26 due to concerns over their job security.

Last month, LG Electronics attempted to sell its smartphone factories to local conglomerate Vingroup, without success.

“LG negotiated with Vingroup to sell its smartphone factories in Vietnam and Brazil. However, the recent negotiations failed mainly due to price disagreements,” the Korea Times today quoted a senior industry official who understood the deal.

Director of the city’s Investment Promotion Agency (IPA), Huynh Thi Lien Phuong said the MoU, which was signed late last month, aimed to build a trading center, casino, high-end entertainment and luxury apartments in the coastal area.

She said the project would be built on an area of 84,000.sq.m on the beach-front on Vo Nguyen Giap and Vo Van Kiet streets in the Son Tra peninsula.

Phuong said Da Nang authorities would auction land-use rights for the finance-trade-casino complex in the future.

She said the city was drawing up a detailed plan for the first international duty-free zone and smart urban area for investors.

Last year, five key investors – the Import-Export Pan Pacific Group (IPPG), T&T Group, New Techco Company from Vietnam, and Sakae Holding and another company from Singapore – registered for a land-use rights auction for a USD 2 billion finance-trade-casino complex in the central city.

Jonathan Hanh Nguyen, who is chairman of IPPG Group, urged the city to build an international standard duty-free zone and recreational area for tourists.

The city’s Department of Natural Resources and Environment said four plots on two coastal facade Vo Van Kiet and Vo Nguyen Giap streets were reserved for finance-trade-casino complex development.

Two years ago, IPPG failed to negotiate with Trung Nam Group to make the Golden Hills area the first duty-free zone and factory outlet center in central Vietnam.

Last month the first downtown free-duty shop, VV Mall was launched at the beach-front Crowne Plaza Da Nang resort in Ngu Hanh Son district.

The Universal Alloy Corporation (UAC) from the US has launched the first aerospace parts project, while LG Electronics began construction of its R&D center in the city.

Da Nang, which is situated at the end of the East-West Economic Corridor, linking Laos, Thailand, Myanmar and Vietnam, is planned as a global destination of tourism, finance, logistics and hi-tech investment.

Source: VNA