LS

■ Completed the construction of a 30,000㎡ site at Yenfong Industrial Complex in Bac Ninh Province, Vietnam, while relocation of its Hanoi plant completed;
■ Annual production will increase significantly from $ 25 million to $ 40 million and aims to surpass the $ 100 million mark by 2030.
■ CEO Koo Ja-kyun remarked, “The Bac Ninh plant is not just a relocation of an existing plant, it will become a key hub for exporting to the ASEAN market”

LS ELECTRIC will expand its presence in the ASEAN market with its Bac Ninh plant in Vietnam serving as a central hub of exports.

On October 26, LS ELECTRIC announced that a full-fledged plant rollout ceremony was held for the Bac Ninh plant at the Yenfong Industrial Complex in Bac Ninh Province, Vietnam. There were 300 officials in attendance, including LS ELECTRIC’s CEO Koo Ja-kyun, Chairperson Nguyen Huong Giang of the Bac Ninh Province People’s Committee, and South Korean Ambassador Oh Young-joo in Hanoi. 

The company’s Vietnam subsidiary and factory located in Dong Anh, Hanoi, will be moved to its business complex in Bac Ninh, after which the company will boost its business expansion further. At the new plant in Bac Ninh situated within a 30,000㎡ site, the space specialized for manufacturing will be twice its former plant in Hanoi.

LS ELECTRIC is part of the first generation of South Korean companies to enter the Vietnamese market. It started its Vietnam operations in 1997 with the construction of a plant in Dong Anh, Hanoi where it produced power system products for 25 years.

CEO Koo Ja-kyun explained, "In our bid to target the global market in earnest, it is critical to establish a sound localization and regional hub strategy." He added, "The relocation to the new Bac Ninh plant is not merely a change of address from the former plant in Hanoi. It will advance and serve as a key hub for our targeted strategy to achieve expansion in ASEAN market."

With the new plant completed, annual production is expected to increase significantly from USD 25 million to USD 40 million and by 2030, annual production will surpass the USD 100 million mark.

LS ELECTRIC has invested around USD 20 million in the construction of the new business complex and has made the strategic decision to strengthen its position in the Vietnamese electric power market.

LS ELECTRIC was the first South Korean electric power company to enter the Vietnamese market in the mid-1990s. Since then, the company was able to build its market share in low-voltage power equipment to over 35%, becoming the top player in the market continuously since 2013.

LS ELECTRIC seeks to look beyond the lower voltage market, add high-end products like high-pressure GIS (gas insulated switchgear) to its product lineup, and diversify its business by expanding to other sectors of the electric power system industry. The company plans to grow its overseas sales using the new plant as a strategic hub.

As Vietnam has begun to move away from a primarily labor-intensive industry structure concentrated in garments and textiles to one geared to electronics and petrochemicals, the country began to see increasing demand for low-voltage power equipment such as switches and circuit breakers as well as standard electric power equipment like switchboards. The demand for electricity in Vietnam is reported to be growing by more than 10% every year.

Vietnam is a member of the ASEAN and thus is exempted from export tariffs in the region. It also geographically borders Laos and Cambodia, two inland countries with high growth potential. As of 2020, the combined gross domestic product (GDP) of ASEAN members was USD 3.106 trillion, the fifth largest in the world.

A LS ELECTRIC official said, "In the market for low-power equipment, we already outperformed global producers from Europe and Japan by becoming the top supplier with the largest market share. With this plant completed, we will be able to solidify our top position in this market. He added, "We will speed up our business expansion in the local market by making robust investments in our business for power systems focused on switchboards and transformers."