By Kang Seung-woo
LS Cable & System Asia has signed a $10 million (11.2 billion won) deal with Denmark’s DONG Energy to supply extra high voltage cables, the firm said, Thursday.
This is the second time for the holding company of LS Cable & System’s two Vietnamese subsidies LS-VINA and LSCV to strike a deal with a European client. Last year, it agreed to a 132 kilovolt cable contract with Energinet, the Danish national transmission system operator for electricity and natural gas.
“The two deals mean that LS Cable & System Asia’s quality and safety management system gains recognition in Europe,” an LS official said.
The product the Korean company will supply is a 1.5 kilometer-long cable, three times as long as a general cable whose length is about 400 to 500 meters.
Longer products offer better profitability for cable makers thanks to cost reductions.
Separately, the company, based in Anyang, Gyeonggi Province, expects to see its business grow in Vietnam. It is expanding the production of power cables at LSCV in Ho Chi Minh.
The Southeast Asian country sees steadily rising demand for cable, sparked by its economic growth, but LS-VINA in Hai Phong lacks capacity to meet the demand.
In particular, Southern Vietnam, in which LSCV is located, has ongoing projects, including building a power plant and foreign firms’ factories, increasing demand for cables.
“When the LSCV factory in Ho Chi Minh completes the expansion of cable production by late June, its sales will start to increase in the second half of the year,” LS Cable & System Asia CEO Shin Yong-hyun said.
Viettel, Vietnam’s largest mobile network operator, is one of the firm’s Vietnamese clients.
“In addition, Vietnam’s booming domestic demand and rising copper price will help LS Cable & System Asia’s 2017 sales and operating profit increase 15 percent from the previous year and they will be record highs,” Shin added.
Foreign direct investment (FDI) is the biggest influence on Vietnam’s domestic demand and total registered FDI from January to April increased to $10.95 billion, up 40.5 percent year-on-year, according to the Vietnamese government.