Korean electric equipment maker LS Electric is expanding its manufacturing in Vietnam, looking to $100 million in annual sales from its subsidiary in the next eight years, four times higher than now.
The company's new three-hectare plant in Bac Ninh province neighboring Hanoi is set to open later this month.
LS Electric vice chairman Lee Kun Wook paid a working visit to Bac Ninh this May to check on the construction of the facility in Yen Phong Industrial Park.
He told provincial authorities that LS Electric Vietnam will relocate its existing Hanoi plant to the site, whose production area is twice that of the other, which opened in 1997.
With its Hanoi plant, LS Electric became one of the first-wave South Korean companies to start operations in Vietnam.
According to Hong Soo-mong, factory director at LS Electric Vietnam, the Hanoi plant is capable of sales worth $25 million annually, but the new plant will be able to deliver $45 million, with Vietnam sales revenue expected to reach $100 million by 2030.
In addition to the main production site in the north, LS Electric Vietnam operates a branch in Ho Chi Minh City to establish a nationwide sales network for power systems and power equipment.
At the “2022 Vietnam-Korea Smart Electric & Energy Fair” in HCMC this July, the firm said its current low-voltage power equipment market share in Vietnam has risen around 50% from 30% in 2013.
With the new plant about to launch in Bac Ninh, LS Electric expects a higher market share, as well as Southeast Asian market expansion, as Vietnam is a suitable market to initiate such enlargement.
Major Korean companies like Samsung, LG, and Lotte are expanding in the Vietnamese market, and LS Electric is seeking to make inroads into the development, as some 60% of LS Electric Vietnam’s sales are from Korean companies in the country, according to Hong Soo-mong.
“We are also trying to penetrate local Vietnamese companies as well. Our vision is to develop the new plant into a production base in Southeast Asia. We plan on providing a total solution in Vietnam, including technology and services,” the LS Electric Vietnam factory director was quoted by Korea Times as saying.
LS Electric is seeking to establish Vietnam as its base for producing and selling key power solutions in Southeast Asia under a strategy to solidify its position as a definite leader in the low-voltage power equipment field. The expansion comes as LS Electric chairman Koo Ja-kyun is pushing to increase global market share, the Korean newspaper said Friday.
“LS Electric's sustainable growth must make clear that the limitations of the domestic market can only be overcome through the global market, and this must be taken as a key and essential factor. We will have to take the lead in the region beyond this,” Koo was quoted as saying.