LS Cable & System to Reenter 4 Trillion Era with Regional Strategies

According to industry sources on January 8, LS Cable & System (LS C&S) in a slump for a long time in recent years made an impressive turnaround with sales of an estimated 3.5 trillion won or US$3.15 billion (on a consolidated basis), last year. The company is painting a rosy picture that if this trend holds, its sales will exceed 4 trillion won (US$3.6 billion) this year and the company will be able to achieve "its second take-off."

On January 2, chairman Koo said in his New Year message, "We should expand our overseas business by operating profit-oriented business such as high value-added products and differentiated products and upgrading our global capabilities."

Last year, orders to LS C&S from Asia exceeded 700 billion won (US$630 million), more than triple the amount of 2016 (220 billion won or US$198 million). If this trend continues, its overseas sales are expected to top 2 trillion won (US$1.8 billion) which eclipses 1.742 trillion won (US$US$1.56 billion) in 2016.

Among its global strategies, the preemption strategy garners much attention first. LS C&S established LS EV Poland, an electric vehicle battery parts manufacturing company, in Poland in early November of last year. The company is the first Korean cable manufacturer in Europe. On November 14, last year, LS C&S broke ground for a power cable plant (LSGM) in Myanmar. This is because the company has employed a strategy to preempt the market by producing products locally, thereby securing price competitiveness and satisfying customers.

In Asia and the Middle East, its main markets, the cable-specialized company is concentrating on maximizing sales. LS C&S landed orders including one for including an AIIB loan project amounting to a total of more than US$100 million last year from Bangladesh. After building trust via small-scale projects for Bangladesh, LS C&S established a branch in January, last year, and carried out a full-scale marketing campaign in the country.

As the construction of high-speed telecommunication networks in Vietnam and other Asian countries spiked, LS C&S expanded its optical cable production facilities at Ho Chi Minh City LSCV Plant in the first half of last year. As a result, LS C&S Asia is expected to record all-time-high sales with more than 20% sales growth from the previous year. At the end of last year, LS Hongqi Cable, a Chinese production corporation of LS C&S, signed a $53 million ultra high voltage underground cable contract with the MEW of Kuwait.

In the United States and Europe, LS C&S is pursuing an expansion strategy centering on products whose demand is increasing. In particular, in the US, LS C&S established a power cable manufacturing corporation (LSCUS) in North Carolina in March of last year and is seeking to ramp up its market share even in the middle-voltage power cable market based on its first place in the high-end power cable market.

Its advancement in the European market is also picking up. In April last year, the company established a sales subsidiary in France, focusing on telecommunication cables, in addition to a sales corporation focusing on the existing power cable business in the UK. In August last year, the French corporation of LS C&S won a fiber-optic cable contract by beating a consortium of local companies in Italy, signaling its successful start.

Business Korea