LS Cable & System establishes construction unitLS Cable & System, the nation’s largest cable maker, said yesterday it recently established a construction business unit in a bid to get more turn-key projects that the company would manage from start to finish.
Cable orders generally divide supplying materials, electrical construction and civil engineering. Previously, cable manufacturers focused on supplying cables.
The affiliate of LS Group won its first turn-key order in 2004 in Qatar. It has global construction centers in Qatar, Singapore, India and Saudi Arabia that recruit local engineers.
“Competition in the global cable market is getting fierce as companies from China, India and the Middle East are making headway due to low prices, so advanced technology and management skills are becoming key factors to differentiate us from them,” the company said in a release. “This decision is to reinforce our construction ability to have more opportunities to getting orders and improve our profits.”
LS said it has gathered its electric, underwater and communication construction team into one unit to increase efficiency. It especially aims to build up its underwater cable construction business this year.
The company hired construction industry veteran Kim Tae-hoon to lead its construction business unit. He spent 18 years in Daewoo Engineering and Construction and 12 years in GS Engineering and Construction.
“After going through years of trial and error, LS Cable & System is now acknowledged overseas as a company that has product quality and construction ability,” Kim said. “This made it possible for the company to secure large projects in the Middle East last year.” This year, LS has been looking for a fresh start. The company, which is not currently listed in the stock market, had sales of 4.59 trillion won ($4.2 billion) last year, down 9.3 percent from a year ago, while its operating profit surged 38.2 percent year-on-year to 124.9 billion won.
However, it posted a net loss of 87.2 billion won last year due to the poor performance of overseas affiliates. In addition, LS announced to shut down small affiliate JS Cable following the corruption scandal in which the company fabricated test results and supplied poor-quality cables to nuclear power plants.
The company is expected to focus on strengthening profitability instead of expanding this year. CEO Koo Ja-eun told local media recently that the company is not considering acquiring nation’s No. 2 player Taihan Electric Wire as it doesn’t want to create a monopoly controversy.
BY JOO KYUNG-DON [email@example.com]