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| A worker produces cable conductors at LS HongQi Cable's plant in Yichang, China. / Courtesy of LS Cable & System |
By Yoon Sung-won
LS HongQi Cable, the China-based cable manufacturing unit of LS Cable & System, has struck a $53 million deal to provide extra high-voltage underground cables to the Ministry of Electricity and Water in Kuwait, the company said Tuesday.
This is the first extra high-voltage cable deal LS HongQi Cable has won in the Middle Eastern market. The company will supply 132 kilovolt cables throughout Kuwait from next year through 2019 using a turnkey system, it said.
"LS HongQi Cable achieved the deal by shifting its target to win a deal from the domestic market to overseas regions such as the Middle East and Asia starting last year," LS Cable & System President and CEO Myung Roe-hyun said in a statement.
"Because of the deal, LS HongQi Cable can expect to win more contracts on the global stage."
Like in other countries in the Middle Eastern market, the demand for electricity and infrastructure has been on the rise in Kuwait thanks to expanding urban regions and a growing population. But a decrease in oil prices in recent years slowed down large-scale electricity infrastructure projects, intensifying competition for cable providers in such deals, according to the company.
LS Cable & System said it has boosted market competitiveness by adopting the cross-selling strategy with LS HongQi Cable. It has directly produced high-tech cable products while making its Chinese subsidiary mass-produce ordinary cable products, securing product quality and price competitiveness.
In the underground power cable market, products that can carry electricity at a higher voltage require a higher level of technologies and time to develop and manufacture. Korean cable providers are concentrating on developing 220 kilovolt cables and on winning turnkey deals to outcompete foreign companies.
Alongside its Chinese subsidiary, LS Cable & System said it is seeking to take advantage in the electricity infrastructure business in developing countries in Asia, Africa and South America.
"Many projects in these regions offer opportunities to bid only to those companies with manufacturing facilities in China," an LS Cable & System official said.
