By Kim Yoo-chul
Staff reporter
Samsung Group said Tuesday it will invest up to 23 trillion won ($21 billion) in eco-friendly and healthcare businesses by 2020 in a bid to secure future growth engines.
Samsung has picked solar cells, rechargeable batteries for electric vehicles, light emitting diodes (LED) and related technologies, biopharmaceuticals and medical devices as its next key drivers in earnings. The company expects the five areas to yield $44 billion in annual sales and create 45,000 new jobs by 2020.
"Environment, energy and healthcare will be the top industries for the next 10 years. Marketability was the top consideration for identification," Rhee In-yong, a senior vice president of Samsung's Corporate Communication Team, said in a press briefing.
The executive said more "follow-up measures," including updated group-wide investment plans, will be formulated shortly. Several weeks ago, Samsung announced it would substantially increase its capital spending as consumers were spending more on consumer gadgets amid the economic recovery.
The plan was approved at a meeting of top executives of electronics and medical affiliates, Monday, attended by Samsung Electronics Chairman Lee Kun-hee and his son and heir apparent Lee Jae-yong, Rhee told reporters.
The announcement came less than two months after Lee Kun-hee made an "overnight comeback" as the chairman of Samsung Electronics after receiving a presidential pardon in a bribery scandal.
In March, Lee said Samsung was facing its biggest ever challenges amid business uncertainties, predicting that products that now represent Samsung would disappear in 10 years.
The company is the world's top producer of computer chips and flat-screens used in digital devices such as televisions. But the industries are highly susceptible to external factors as consumer spending on electronic goods is dependent upon economic conditions.
Chips and flat-screens account for some 70 percent of Samsung Electronics' annual profit followed by mobile phones. Samsung is the world's second largest handset maker following Nokia.
"While other global companies hesitate, we must move ahead decisively to take this opportunity. Governments are heavily investing in green industries to address the issue of depleting energy resources. Samsung needs new and visible earnings drivers," Lee Kun-hee was quoted as saying in a press release.
By category, Samsung will invest 6 trillion won in the development of solar cells, which are estimated to generate 10 trillion won in annual revenue and will employ 10,000 workers by 2020.
It will also spend 5.4 trillion won on rechargeable batteries for hybrid electric vehicles that are likely to earn 10.2 trillion won and employ 7,600 people. It plans to invest 8.6 trillion won and 2.1 trillion won on LED technology and bio-pharmaceuticals, respectively, by 2020.
Shares of "announcement-related" companies rose following the announcement. Samsung Electronics, the group's key affiliate, is the world's top technology company, followed by Hewlett-Packard of the United States and Siemens of Germany.
Samsung Group's sales reached 191 trillion won in 2008. It has been reported that the group's 2009 sales were more than 200 trillion won.