A view of the LS Vina Plant in Vietnam where $50 million power cable orders from Western Power of Australia will be produced and delivered. (Photos: LSCS)

President Koo Ja-yeop of LS Cable and System.

LS Cable & System announced that it recently signed a $50 million contract with Western Power of Australia to supply power cables.
This is the largest contract won by a Korean cable manufacturer in Australia. It is a significant achievement for LS Cable & System to be listed as a preferred supplier only two years after establishing a subsidiary in the country in 2016.
In Australia, the demand for power cables necessary for resource development industries and new and renewable energy power generation, such as wind and solar power generation, is on the rise. LS Cable & System succeeded in winning the contract by securing both price and quality competitiveness through its Vietnamese production subsidiary of LS Cable & System Asia.
“Our strategy of strengthening the competitiveness of each overseas base through a swift response to changes in the global market environment is producing results,” said LS Cable & System CEO Roe-hyun Myung. “With the awarding of this contract, we expect to expand our presence share in the Australia market.”
LS Cable & System is expanding it overseas presence by establishing production bases for power cables, optical cables and electric vehicle parts in the U.S., Myanmar, France and Poland in 2017.
LS Cable & System Asia announced on April 5 that they will be investing approximately 10 billion won ($10 million) in LS-VINA, the company's production subsidiary located in Haiphong, Vietnam, to increase annual capacity of copper rods from 27,000 tons to 100,000 tons, a 3.7 fold increase. Production and sales will begin in the first half of next year.
Copper rods are made by melting electrolytic copper in furnace then extruding wires that are 8mm in diameter. They are key products for making conductors that deliver electricity in cables. LS Cable & System Asia saw an increase in its cable sales which it could not meet with its existing copper rod production facilities, so it had to purchase copper rods from other companies.
With this investment, LS Cable & System Asia plans to meet market demand through increased production capacity and sell any excess to other companies. In Vietnam, there has been an increase in investment for electrical grids due to foreign investment and increased construction. As a result, the market size for copper rods has also increased from 200,000 tons in 2017 to a projected total of 300,000 tons in 2021.
“Through the introduction of a large melting furnace, we can reduce production costs and produce copper rods for fine wire,” said the CEO of LS Cable & System Asia. “First, we will target the Vietnamese domestic market, and then expand sales to overseas markets.”
LS Cable & System Asia invested in production facilities for optical cables in 2017, and when the investment in production facilities for medium voltage power lines and bus ducts are completed in the first half of this year, its growth is expected to accelerate.
With the expansion of copper rod facilities, the foundations to achieve the company's goal of reaching 1 trillion won ($900 million) in sales by 2020 will be strengthened. LS Cable & System Asia is the leader of the Vietnamese cable market, with 403.7 billion won ($300 million) in consolidated sales, and 19.8 billion won ($18 million) in consolidated operating profits as of last year.