LS Cable & System Lays out Plan to Set up Submarine Cable Plant in US
By Michael Herh, BusinessKorea
October 23, 2023
LS Cable & System announced a plan to build a submarine cable production plant in the United States in a press conference held at LS Cable & System’s Donghae factory on Oct. 19.
“We have confirmed the construction of a plant in the United States and are considering building a plant in Europe,” Kim Hyung-won, vice president of LS Cable & System’s energy and construction business, when asked about the company’s plan to expand production facilities during the press conference. He continued, “LS Cable & System Asia’s Vietnam plant is next on our list.” The production capacity of the U.S. plant will start at 50 percent of that of the Donghae plant. The details of the investment amount, location, and timing of the investment are not decided yet.
Kim mentioned the United Kingdom as a possible location for the European plant. “There are two main markets in Europe — an inland market centered on Germany, and an island market centered on the United Kingdom,” Kim said. “LS Cable & System is focusing on the United Kingdom. We are planning to produce high-voltage direct current [HVDC] submarine cables in the United Kingdom and export them to the inland market.”
LS Cable & System Asia is in talks with Vietnam’s PTSC, a subsidiary of Petrovietnam to build a submarine cable factory in Vietnam.
LS Cable & System wants to secure production facilities in each of its major locations due to transportation costs. Large-scale submarine cables have a huge volume and weight, and transportation costs account for 15 to 20 percent of their selling prices. Even if a Korean cable maker has an excellent manufacturing capacity, the cable maker cannot compete in a price war if it has to ship products to the United States and Europe from Korea.