Samsung to build £600m electronics factory at Teeside

Samsung, the South Korean electronics group, is to set up a European headquarters in the UK employing several hundred people.

The world's 14th largest company, according to Fortune magazine, also intends to invest in several social welfare projects.

Samsung is renowned in South Korea for its social responsibility, and is believed to have studied Cadbury's Bournville community in the west Midlands.

The company, which is building a £600m electronics factory on Teeside, will next week unveil a five-year plan to expand in the UK and Europe. Like Japanese and other South Korean companies, Samsung wants to globalise its manufacturing operations and intends to use the UK as its bridge into the EU.

Next week's announcement will include detailed plans for investments in community projects alongside its factories and offices. The company is believed to be considering building housing and community centres.

Samsung has been impressed by Bournville, one of several towns established by philanthropists last century. A source said the company has a "vision to build a community''.

It is unclear whether the headquarters would be built in London, or at the Teeside plant. Samsung already has an electronics division in Frankfurt, but wants to establish a centre for its other divisions - engineering, chemicals and financial services.

All these operations will be developed in Europe, with the headquarters employing up to 500 people within five years.

Samsung is the biggest and oldest of South Korea's family-owned business empires. Its chairman has been known to telephone offices in the evening, chastising employees for working late when they should be at home with their families.

The new president of the European operation is to be Sung Rai Choi.

As well as the Teeside electronics plant, Samsung plans a UK excavator manufacturing plant, and may form a joint venture in Europe with NEC to build a computer chip factory. There has also been talk of Samsung entering into car manufacturing.

Germany has so far attracted most South Korean investment in Europe, with 20 per cent of the total. The UK is second with 16 per cent, but that is likely to change. Daewoo and Mitsubishi are both increasing their UK investment.

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