LS C&S wins $13 mil power cable deal in Myanmar
Workers produce transmission cables at a manufacturing facility of LS-VINA, the Vietnamese subsidiary of LS Cable & System, in Haiphong, Vietnam. / Courtesy of LS C&S
By Yoon Sung-won
LS Cable & System (LS C&S), a leading worldwide cable manufacturer, said Wednesday its Vietnamese subsidiary has won the largest-ever cable supply contract in Myanmar.
Under an agreement with the Southeast Asian country’s Ministry of Electric Power, LS C&S’ local subsidiary LS-VINA will supply transmission cables worth $13 million, which accounts for half of the ministry’s annual power cable purchases.
The company said it expects the deal will establish a beachhead for LS C&S’s advance into the power market of Myanmar.
“The contract with Myanmar’s Ministry of Electric Power is very meaningful in that we can preempt the country’s cable market, which is expected to grow quickly,” LS C&S Production Group President Kim Seon-kook said in a statement.
“We are also planning to capitalize on the stable technology of our Vietnamese subsidiary to reinforce marketing for telecommunication as well as power cables.”
LS C&S said it has closely competed with other cable makers from China, Indonesia and Myanmar in the latest bidding.
“We could become the sole contractor as we have been highly rated in technology as well as in price competitiveness, which was secured through the Vietnamese subsidiary,” the company said. “In the past, Myanmar’s Ministry of Electric Power used to split its orders among three or four cable makers.”
LS C&S said the demand for electric power is increasing sharply in Myanmar amid rapid economic growth. But the electrification rate remains under 30 percent, causing a short supply of electricity nationwide.
To tackle such a problem, the Myanmar government has pushed ahead with a plan since 2001 to bolster its electricity transmission and distribution infrastructure through six stages by investing a total of $9 billion by 2031.
In particular, the annual power cable market is expected to double from $240 million in 2013 to $480 million in 2020, according to the company.
LS C&S’ Vietnamese subsidiary is the top vender of cable products in Vietnam. It has recently been taking advantage of its price competitiveness and technology to expand exports not only to Asian countries but also to the entire world, including Europe and the Americas.
Its holding company, LS C&S Asia, was established in Korea and is scheduled to be listed on the Seoul bourse in the first half of next year. In 2014, sales amounted to 400 billion won and for this year the goal is 480 billion won, the company said.