LS Group bets big on US power infra market

US President Donald Trump’s campaign pledge to expand public investment on infrastructure could be seen as only benefitting local companies there.

But for LS Group, a South Korean conglomerate that runs power and cable businesses, Trump’s pledge on the public sector appears to be a golden opportunity.

Such confidence comes from its 2008 acquisition of a US cable maker, Superior Essex (SPSX), which is the No. 1 maker of winding wire products and communication cables in North America.

The deal made LS Group the world’s third-largest cable maker and is now creating new business opportunities, the company said. In light of growing demand for communication cables in North America, SPSX saw a business turnaround last year and signed a major supply deal with US auto giant Tesla to supply auto cables for all of its models.

In March, the group’s cable affiliate LS Cable & System acquired another power cable plant from SPSX in North Carolina. The deal is expected to bring more opportunities due to the US administration’s plan to replace old power infrastructure. The cable affiliate also signed a $47 million deal with New York Power Authority to produce a 10.3 kilometer underwater cable.

LS Group has also been expanding its operation in the US by entering the tractor market and investing in a company related to shale gas. As of 2016, the group hired around 2,000 workers, generating $1.7 billion in sales.

Another major subsidiary of the group, LS Industrial Systems, is also making efforts to enter the US market by securing safety standard certification for energy storage systems and power conditioning systems.

LS Mtron was named the top global tractor maker for the third consecutive year by Equipment Dealers Association, while E1, an importer of liquefied petroleum gas, invested 80 billion won in Cardinal Gas Service, a midstream company in Ohio’s Utica shale play.

LS Group’s inroads into the US market is being led by its Chairman Christopher Koo, a businessman who climbed the corporate ladder at LG Group.

“Learning from Silicon Valley’s spirit of making ceaseless efforts to create new ideas, LS will raise the group’s R&D capacity and learn from innovative cases (in Silicon Valley) and strengthen business partnership,” he said at a meeting in Silicon Valley in 2014.

By Cho Chung-un (christory@heraldcorp.com)