Such rapid modernization, like that which South Korea went through in the 1970s and ’80s, involves massive investments in infrastructure, which will provide more opportunities for LS Cable and System Asia, said its President and CEO Kwon Young-il in an interview.
“The Southeast Asian market has been growing at an average of 5.2 percent, higher than that of China and South Korea where the speed of economic growth has been slowing since 2018,” Kwon said.
“The ASEAN market has the potential to become the fourth-largest economic bloc, buttressed by the current population of 660 million. We believe that demand for electricity will double by the year 2030,” he said, stressing the company’s goal to become the No. 1 cable supplier in the region.
|LS Cable and System Asia President and CEO Kwon Young-il (Park Hyun-koo/The Korea Herald)|
The sense of confidence comes from its solid, quickly growing business in Vietnam.
LS C&S Asia has the leading market share of 21 percent in the cable market worth 1.2 trillion won ($1 billion) in Vietnam.
Although its operations are at a nascent stage in Myanmar, LS C&S Asia is expected to post revenue of nearly 400 billion won with operating profit of 19 billion won by the third quarter this year, a record-high performance since its establishment in 1996.
This year, it signed a 56 billion-won deal with Hoanh Son Group to build a solar power plant, opening the door for the company to tap into the emerging green energy market in Vietnam. It also expanded its production capacity of copper conductor, a major cable component, from 25,000 tons a year to 100,000 tons, with the hope of generating an additional annual revenue of 400 billion won.
Considering its business growth not only in ASEAN region but also in other regions including Europe and South America, the company expects to reach 1 trillion won in sales by 2023, the highest for a single cable supplier operating overseas.
LS paints a rosy picture citing Vietnam’s explosive industrial growth. Not just growing demand for electricity cables, there are also the emerging local businesses to manufacture homegrown electric vehicles, such as Vinfast, an auto subsidiary of the country’s largest conglomerate Vin Group.
To turn such growth into new business opportunities, LS C&S Asia has been bolstering its marketing efforts, as well as making further investments to diversify its product lineup.
LS C&S Asia is the holding firm of the Korean cable maker’s two Vietnamese units and one in Myanmar: LS-VINA, LSCV and LSGM.
LS-VINA, set up in 1996 in Hai Phong, east of Hanoi, produces power cables mainly for the local market. LSCV, which was established in 2006 in Ho Chi Minh City, produces communications cables and ships 95 percent of its products to global markets. It is the only company in Vietnam that produces high-voltage cables.
The product portfolio also includes unshielded twisted pair cables and copper conductors manufactured at Vietnamese factories that are shipped overseas -- not only to neighboring countries, but also the Middle East and the US.
Alongside Vietnam, the company also plans to expand its business to other ASEAN member countries, such as Myanmar, Laos and Cambodia.
The company has completed construction of a manufacturing plant in Myanmar last year, to take advantage of the nation’s rapid economic growth, large population, English fluency and business-friendly policies. It expects to see a rapid growth in its revenue from the new plant. Fifty percent of cable demand in Myanmar relies on imports.
“Taking the next step forward, we are looking for opportunities in Cambodia, Laos and Thailand where we can have a competitive advantage in terms of logistics,” the CEO said.
Calling Vietnam its strategic base, Kwon said the company plans to export made-in-Vietnam products -- high quality but low price, due to relatively cheap labor costs -- to other continents including Australia, North America and Northeast Asia.
“We will collaborate with the parent company LS C&S to diversify our market destinations by positioning ourselves as a reliable supplier of cables priced at reasonable costs, while having it seek exports of highly advanced items like submarine cables.”
Kwon was appointed as the head of LS C&S Asia in January, after building his expertise in the cable market by taking crucial roles as the head of the company’s overseas operation in China and submarine cable division.
LS C&S Asia is a listed company on Korea’s main bourse Kospi.
By Cho Chung-un (firstname.lastname@example.org)