LS Eco Energy aims to double revenue with new undersea cable business

Industry

Published: 30 May. 2024, 19:16 Updated: 30 May. 2024, 19:17

LS Eco Energy aims to double revenue with new undersea cable business

LS Eco Energy CEO Lee Sang-ho talks to reporters and investors during the company’s Value-Up Day event at FKI Tower in Yeongdeungpo District, western Seoul, on Thursday. [LS ECO ENERGY]

LS Eco Energy aims to more than double its revenue by 2030 with a focus on the undersea cable and rare earth materials business.

The cable manufacturer, 61.1 percent owned by LS Cable and System (LS C&S), is considering building undersea cable plants in Europe and Vietnam. The company is set on capitalizing on increasing demand for ultrahigh-voltage undersea cables for use in large-scale offshore grids and wind power plants, which are continuing to pop up around the world as countries tighten their environmental regulations.

These are just a few of the plans that LS Eco Energy CEO Lee Sang-ho outlined for reporters and investors at the company's Value-up Day at Seoul's FKI Tower on Tuesday, where the company also announced its goal of boosting revenue 2.5 times to reach 1.8 trillion won ($1.3 billion) by 2030.

“We are now in the age of electricity, and the demand for communications and undersea cables is exploding,” the CEO said at the event. “We will achieve growth without chasm,” he added, referring to the gap in a business's life cycle.

Of the 1.8 trillion won, the company predicted that 180 to 200 billion would come from its new rare earth material business, 30 billion to 40 billion won from the undersea cables and 1.25 trillion won from its existing electricity and cable products. The firm pointed to data projecting booming demand for electricity over at least 15 years to power AI, data centers and EVs.

The company, which is based in Vietnam, says it plans to construct a factory in the country that will source 500 tons of rare earth to produce rare earth metals and alloys. LS Eco Advanced Materials, another LS C&S subsidiary, will use substances in the manufacturing of permanent magnets for EVs.

LS Eco Energy is Vietnam’s leading cable maker. It is LS C&S’s first overseas production site for ultrahigh-voltage cables. More than 30 percent of its revenue comes from North America and Europe.

“Companies leaving China for geopolitical reasons regard Vietnam as an alternative,” Lee said.

“Localization is key for businesses. It will be our competitive edge that allows for cable production at relatively lower prices due to cheaper labor prices and abundant raw materials in Vietnam,” he said, adding that “Vietnam is second to China in the amount of rare earth reserves.”

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]