LS Cable & System Asia (Shin-YongHyun, CEO) announced on April 5 that they will be investing approximately 10 billion won(approx. 10 million USD) 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.
Shin-YongHyun, CEO of LS Cable & System Asia said, “through the introduction of a large melting furnace, we can reduce production costs and produce copper rods for fine wire. 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 (MV) power lines and bus ducts are completed in the first half of this year, its growth is expected to accelerate. Especially, with the expansion of copper rod facilities, the foundations to achieve the company's goal of reaching 1 trillion won (approx. 900 million USD) in sales by 2020 will be strengthened.
LS Cable & System Asia is the leader of the Vietnamese cable market, with 403.7 billion won (approx. 300 million USD) in consolidated sales, and 19.8 billion won (approx. 18 million USD) in consolidated operating profits as of last year.