LS Cable & System (LS C&S) announced that its Vietnamese subsidiary, LS-VINA recently won the contract from Myanmar’s Ministry of Electric Power for the supply of transmission lines worth USD13 million.
This is the largest contract that LS C&S has so far received from Myanmar and accounts for half of the annual power cable purchase of Myanmar’s Ministry of Electric Power. This contract is expected to establish a bridgehead for LS C&S’s advance into the power market of Myanmar.
LS C&S fiercely competed with Chinese, Indonesian and Myanmar cablemakers in this bidding but could become the sole contractor as the company was highly rated in technology as well as in price competitiveness, which was secured through the Vietnamese subsidiary. LS C&S said that Myanmar’s Ministry of Electric Power used to split its orders among 3~4 cablemakers.
“This contract is very meaningful in that we can preempt the Myanmar cable market, which is expected to grow quickly,” said Seon-Kook Kim, President of the Production Group of LS C&S. “We are also planning to capitalize on the stable technology of the Vietnamese subsidiary to reinforce our marketing for telecommunication cables as well as for power cables.”
Demand for electric power is sharply increasing in Myanmar due to rapid economic growth, but the electrification rate is less than 30%. Indeed, there is no question that electricity in the country is in short supply. Accordingly, the Myanmar government is known to be following through with a plan launched in 2001 that will, through a total investment of more than USD9 billion, bolster its transmission and distribution infrastructure in 6 stages through 2031.
In particular, the annual cable market is emerging as a blue ocean that is expected to double from USD240 million in 2013 to USD480 million in 2020.
LS C&S’s Vietnamese subsidiary is the No. 1 cable manufacturer in Vietnam. It has recently been taking advantage of its price competitiveness and technology to expand exports not only to Asian countries but also 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 Korea Exchange in the first half of next year. In 2014, sales amounted to KRW400 billion, and for this year the goal is KRW480 billion.