Feb. 28 (Tues.), 2017 - LS Cable & System Asia announced that Gaon Cable, its affiliate, and MJTD, a Myanmar special economic zone development company, held a signing ceremony for investing in a joint venture in Myanmar.
LS Cable & System and Gaon Cable will invest a total of $18 million at a 50:50 ratio to establish a production subsidiary to be known as LSGM (LS-Gaon Cable Myanmar) in the Thilawa Special Economic Zone this coming May. Completion of construction will occur in 2018. The plant will be constructed on a lot of about 66,000 m2, and produce aerial cables for power infrastructure, and low-voltage (LV) cables for buildings and residences.
The Thilawa Special Economic Zone is one of the big three special economic zones in Myanmar. It is located about 20km south of Yangon, the economic capital of Myanmar. The total area is 24km2. The Myanmar government and a Japanese joint venture MJTD (Myanmar Japan Thilawa Development) are leading the development.
“LS Cable & System Asia has strengths in the market of Overhead Transmission Lines which are mostly supplied to power authorities and installed on pylons. Gaon Cable has strengths in the LV-centered retail market. So synergies are expected,” said Yong-Hyun Shin, CEO of LS Cable & System Asia. “We will gradually expand the Myanmar subsidiary’s production to include medium-voltage (MV) and high-voltage (HV) cables, and make sure that it will grow like the LS Cable and System Asia which grew 240 times 20 years after its entry into the Vietnamese market.”
Some Southeast Asian countries are substituting Overhead Transmission Lines, used on pylons, with underground cables, but Myanmar is still using pylons for most of its power transmission. Also, as the construction business is booming in special economic zones, the demand for LV cables is also rapidly increasing.
“As the Myanmar economy is growing quickly, the power cable market is also expected to grow by more than 9% on average a year,” said Jae-In Yoon, CEO of Gaon Cable. “Since Myanmar imports more than 50% of its power cables, the Myanmar subsidiary will enable us to preempt the market.”
LS Cable & System’s subsidiary, LS Cable & System Asia, is the holding company of two Vietnamese companies (LS-VINA Cable & System and LSCV), and it is the No. 1 cablemaker in Vietnam. Gaon Cable is an affiliate of LS Group, and it mainly produces medium and low voltage cables.