Coway boosts investment in Vietnam Water purifier rental company increases capital contribution to Vietnam subsidiary
Translated by Ryu Ho-joung 공개 2021-06-03 07:49:17
이 기사는 2021년 06월 03일 07:44 thebell 에 표출된 기사입니다.
South Korea’s home appliances rental company Coway is expanding investment in Vietnam as it hopes to replicate its success in Malaysia.Coway decided in March to contribute more capital to its Vietnamese subsidiary, Coway Vina Co Ltd, according to industry sources. The decision was made by the board’s management committee, which consists of the company’s three top executives including chairman Bang Jun-hyuk.
Though the size of an additional capital contribution is not specified, a Coway representative said the money would be “used to build up rental assets” as the company continues to pioneer the market for environmental home appliances rental services in Vietnam.
The South Korean firm launched its Vietnam business in July 2020 despite headwinds from the Covid-19 pandemic, making an initial capital contribution of 1.55 billion won ($1.4 million) to the subsidiary.
Coway intends to use its experience and know-how from the Malaysian market to dominate Vietnam’s nascent market for home appliance rental services. Since its launch in 2006, the company’s Malaysian business has achieved a two-digit annual growth, with more than a 30% share in the country’s water purifier rental market according to Korea Trade-Investment Promotion Agency.
Coway is a pioneering company in Malaysia’s home appliance rental sector. In 2007, it started to provide water purifier rental and coordinator services in the country in the same way it does in South Korea. The company also obtained a halal certification for the first time in the industry in 2010. The Malaysian unit generated a net income of 105 billion won on revenue of 708.5 billion won last year.
While Vietnam’s national income is lower than that of Malaysia, the country’s home appliance rental market is estimated to grow rapidly in the next few years, surpassing $221 million by 2023.
Coway’s board of directors also decided last month to establish subsidiaries in Japan and Europe as part of efforts to boost its overseas expansion.
Coway previously had operations in Japan and Italy, but they were wound down in 2013 shortly after the company was acquired by private equity firm MBK Partners. Gaming company Netmarble is currently the largest shareholder of the company. (Reporting by Seul-gi Kim)
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