Samsung Group to Expand Investment by 12%

SEOUL—Samsung Group said it will boost investment by 12% to a record $41.6 billion this year, just a day after its flagship unit disclosed plans to raise $1 billion in the debt market to fund expansion plans.South Korea's biggest conglomerate by assets didn't provide a breakdown of its investment plans by business division, but said it is looking to expand investment into new growth areas despite heightened uncertainties stemming from the global economic downturn."Samsung has decided to make the biggest-ever investment of 47.8 trillion won ($41.6 billion) this year in order to solidify its dominance in key businesses in the global market and to dominate new growth areas in advance," the group said in a statement.By category, the group said its facilities investment will total 31 trillion won this year, up 11% from last year, while capital outlays for research and development will increase by 13% to 13.6 trillion won. UGG Classic Tall Boots The group, which spent 42.8 trillion won last year, said the remainder will go toward other investment tools, such as stake purchases.Following the announcement, shares of flagship unit Samsung Electronics Co. rose 1.2% to 1,042,000 won Tuesday afternoon, outperforming its peers in the technology sector, as the group's higher investment budget buoyed investors' sentiment, analysts said.The aggressive investment plan comes at a time when global technology companies are struggling to withstand external headwinds due to the global economic slowdown, which has taken a toll on consumer demand world-wide.On Monday, Samsung Electronics, the world's largest technology manufacturer by revenue, said it asked bankers to help it raise $1 billion in a bond offering, the first time since 1997 that the manufacturer has turned to the long-term debt market to pay for expansion.The bond issue is a sign that the company's capacity to stay at the head of all its capital-intensive industries with its own money might be nearing an end. For the past decade and a half, Samsung has been able to fund tens of billions of dollars from its internal reserves for its investment at its capital-intensive businesses, such as semiconductors and displays.Samsung Electronics has said in recent months that it will sharply increase its investment in new business areas, especially when its mainstay businesses—memory chips and liquid crystal displays—have been buffeted by a faltering global economy.The bond will be issued through the company's U.S. unit, which sent out a request for proposals to investment banks for the bond offering last week. It is expected to select lead managers for the offering after the Lunar New Year holiday in South Korea, which ends Jan. 24.Earlier this month, Samsung Electronics said it expects an operating profit of 16.2 trillion won for 2011 on record sales of 164.7 trillion won. The company will disclose its detailed results Jan. 27.Samsung Group, which oversees about 66 affiliates and has businesses ranging from electronics to finance and insurance, said Tuesday it plans to hire 26,000 employees this year, up 4% from last year.