S. Korean firms back Vietnam ops

Seoul More than 90 per cent of South Korean companies operating in Vietnam intend to continue their businesses in the Southeast Asian country despite rising labour costs and increasing regulatory burdens, according to a survey released on Sunday. The survey, conducted by the Korea International Trade Association (KITA), found that 92 per cent of South Korean companies operating in Vietnam had no plans to withdraw from the country. Among those planning to maintain their presence, 87.5 per cent cited Vietnam's cost advantage compared with other countries as the primary reason for continuing operations. The findings come amid a significant increase in wages in Vietnam over the past 14 years. According to KITA, the monthly minimum wage for Vietnamese workers rose more than 4.5 times, from $45.4 in 2010 to $205.3 in 2024. The association said monthly wages increased at an average annual rate of 11.4 per cent during the period, representing the fastest pace among major Asian economies. Despite the rising labour expenses, South Korean businesses remain optimistic about Vietnam's economic and commercial prospects. Nearly 60 per cent of respondents expected their operations in the country to improve over the next three to five years. In comparison, only 12.4 per cent expressed a pessimistic outlook. Furthermore, 72 per cent of the companies surveyed believed Vietnam would continue to serve as an important global business hub in the coming years. KITA advised South Korean companies operating in Vietnam to reassess their cost structures and improve operational efficiency to adapt to changing business conditions.