Big businesses plan to invest more

South Korea's 600 largest conglomerates plan to increase investments by 13.7 percent in 2011 but actual spending may be cut due to the global economic slowdown, a poll showed Thursday. The survey conducted by the Federation of Korean Industries (FKI) showed local businesses groups planning to invest a combined 125.39 trillion won (US$108.11 billion) this year on facility upgrades and research and development (R&D). Of the total, manufacturing businesses will invest around 81.13 trillion won, up 9.5 percent compared to the year before, with non-manufacturing sector investment increasing 22.3 percent to slightly more than 44.27 trillion won. The FKI, the lobbying group of large family-owned businesses, said in the first half, conglomerates injected 55.97 trillion won for a gain of 14.1 percent from the previous year, with investments to top 69.42 trillion won in the July-December period. The second half investment target represents a 13.4 percent gain from the year before. "Despite the target set, concerns that the United States may experience a double dip recession, and worries surrounding the eurozone fiscal crisis can affect spending," the FKI said. It said companies have said that they may restrict fresh investment mainly to absolutely necessary areas such as upgrading the semiconductor assembly process and information technology (IT) capabilities. The federation, meanwhile, said that spending by global tech titan Samsung Electronics Co. will likely account for 27.8 percent of the total investment amount. The company, which makes mobile phones, displays, semiconductors and household appliances, announced it would invest 30.71 trillion won overall in 2011, with money earmarked for R&D reaching little over 9 trillion won. The latest findings, meanwhile, showed that 66.0 percent of conglomerates polled said future investment decisions will be determined by overall global and domestic economic conditions. Around 16.8 percent said international energy and commodities prices will affect investment plans.