Hwaseung, a South Korean footwear manufacturer and key supplier to global brands like Adidas, has decided to relocate its planned manufacturing plant from Tamil Nadu to Andhra Pradesh. This move comes after the company signed a memorandum of understanding (MoU) with the Tamil Nadu government in August for the establishment of a new plant.

The initial plan involved an investment of ₹1,720 crore (approximately $206 million) by Hwaseung to set up a non-leather footwear manufacturing facility in Gangaikondan, Tuticorin, Tamil Nadu. This facility was projected to generate around 20,000 direct jobs, making it one of the largest employment-generating footwear projects in the state. The Tamil Nadu government viewed this project as a significant step towards positioning the state as a key hub for non-leather and sustainable footwear exports.

However, Hwaseung has now opted to shift its base to Kuppam, which is the assembly constituency of Andhra Pradesh Chief Minister N. Chandrababu Naidu. The reasons behind this change in plans have not been officially disclosed.

Hwaseung's entry into India's footwear sector was seen as strategic, given the country's growing market and export potential. The company already operates factories in Vietnam, Indonesia, and China. The Tamil Nadu project was expected to boost the local industrial ecosystem by attracting ancillary suppliers and contract manufacturers to the region. The state government had emphasized that nearly 77% of MoUs signed since 2021 had already materialized into real projects, representing investments worth ₹10.32 lakh crore.

The shift by Hwaseung raises questions about the investment climate and industrial policies in both Tamil Nadu and Andhra Pradesh. Andhra Pradesh is rolling out projects worth ₹20 lakh crore to create 2 million jobs in the next four years. This development also occurs amidst broader investment activity in southern Tamil Nadu, including the inauguration of Vietnamese electric vehicle (EV) manufacturer VinFast's integrated EV plant in Thoothukudi in August.

While Hwaseung is shifting its location, other South Korean footwear companies are expanding in Southeast Asia. Sappun, a female-oriented shoe brand, is expanding into Indonesia with exclusive partnerships and has launched stores in Jakarta. Sappun also intends to expand to Vietnam and Japan.