LS Electric Vietnam relocates its main facility to Bac Ninh to boost expansion

According to corporate executives on Thursday, the new factory's location is 30,000 square meters, and the manufacturing facility's area is double that of the present Hanoi plant, with the goal of better penetrating the Southeast Asian market.

“The manufacturing scale has risen dramatically as a result of the transfer. The Hanoi facility could generate $25 million in sales each year, whereas the new Bac Ninh plant will be able to generate $45 million next year. We hope to reach $100 million in yearly sales through the facility by 2030”, according to Hong Soo-mong, manufacturing director of LS Electric Vietnam.

LS Electric intends to strengthen its presence in the Vietnamese power market with the official opening of the new plant later this month. LS Electric was the first Korean electric power firm to enter Vietnam in the mid-1990s and has held the top spot since 2013, accounting for more than 35% of the low-voltage power equipment market.

The company intends to diversify its business structure throughout the power system sector by introducing high-end goods such as ultra-high voltage gas insulated switchgear (GIS) in addition to the low voltage market. The objective is to use the new factory as a basis to increase the share of international sales.

"As Vietnam's industrial structure shifted from labor-intensive industries like textiles to electronics and petrochemicals, there was a rise in demand for low-voltage power devices like switchgear and circuit breakers, as well as general power systems like switchboards. The demand for power in Vietnam is estimated to be expanding at a rate of more than 10% per year "LS Electric Vietnam's CFO, Kim Kyung-soo, stated.

The main product of LS Electric Vietnam is medium voltage metal-wrapped switchgear, which it primarily supplies to big Korean electronics businesses with operations in the nation.

According to Hong, Korean corporations such as Lotte, Samsung, and LG account for around 60% of sales in Vietnam, and the percentage is increasing.” We are also attempting to enter local Vietnamese businesses. Our goal is to turn the factory into a production hub in Southeast Asia. In Vietnam, we intend to provide a complete solution, encompassing technology and services.”

Under a plan to strengthen its position as a clear leader in the low-voltage power equipment market, LS Electric intends to establish Vietnam as its base for producing and distributing critical power solutions in the Association of Southeast Asian Nations (ASEAN) area.

While striving to accelerate market development by aggressive investment in system businesses focusing on switchboards and transformers, the firm now holds the largest market share in Vietnam, beating out major global enterprises from Europe and Japan.

According to the corporation, as an ASEAN member, Vietnam is exempt from regional export taxes and is geographically near interior areas with high development potentials, such as Laos and Cambodia, making operations in the nation more advantageous. ASEAN's GDP was $3.11 trillion in 2020, making it the world's sixth biggest.

Source: The Korean Times