LS Cable & System plans U.S. plant, mulls European JV offers

LS Cable & System submarine cable plant in Donghae, Gangwon Province. [Courtesy of LS Cable & System]

South Korean submarine cable manufacturer LS Cable & System Ltd. is planning to build a plant in the United States, with joint venture requests also pouring in from Europe, according to the company.

“There are many companies that want to finance or partner with us as it is a growing industry with added value in the renewable sector,” LS Cable & System chief financial officer Lee Sang-ho said.

The company is also looking to establish a plant in the United Kingdom. “The European power grid is divided into the mainland based on Germany and the islands centered around the United Kingdom,” LS Cable & System Vice President Kim Hyeong-won said. “We are primarily considering the United Kingdom as a potential location for a submarine cable production factory related to offshore wind power.” One of the reasons LS Cable & System is pursuing overseas production bases is the high cost of transportation.

“Submarine cables are heavy and can only be transported by special ships,” Kim said, explaining that transportation costs from Korea to Europe make up 15 to 20 percent of the selling price. “Since we are not competitive in long-distance transportation, we are promoting production facilities based on regions.”

Kim’s remarks were made when Maeil Business Newspaper visited the company’s submarine cable plant in Donghae, Gangwon Province, on Thursday. Machinery and equipment filled the building space, with copper and polyethylene being transformed by the machines into thick cables with a diameter of about 30 centimeters.

Outside the building, a clearly visible finished product with yellow lines painted on a black background was seen moving along a pathway on top of pillars to be loaded onto a ship at Donghae Port, just across the 4-lane road from the factory. It moved as slowly as a crawling baby, as only 2.5 to 3 kilometers of cable can be loaded onto a ship daily.

“Ultra-high-voltage submarine cables can explode over time if there is even a small foreign object or air bubble between the conductor (which carries electricity) and the insulator (which isolates electricity),” according to the manager of LS Cable & System’s Donghae plant. “This is a product where reliability is crucial, so we handle every step carefully and deliberately.”

The manager, who has worked at the Donghae plant since 2008, has witnessed the plant’s milestones since its completion in 2009. “After announcing our entry into the submarine cable business, we faced significant blockages from foreign companies with more advanced and relevant technology,” he recalled. “It was difficult to purchase used equipment, so we developed everything from scratch.”

The technological capabilities accumulated through operating the plant allowed the company to improve its process by reflecting its know-how in the building process of the company’s second to fourth factories, with the fourth factory beginning operation in May. The facility also has a 172-meter-high production tower, which was the tallest in the world at the time of its construction. This tower is used for the process of coating vertically positioned conductors with a plastic fluid, utilizing Earth’s gravity to easily create uniform circular cables. LS Cable & System’s submarine cable technology is highly regarded globally, with its competition limited to four companies in Italy, France, Germany, and Japan.

Submarine cable technology has significantly increased the company’s value. As worldwide demand for carbon neutrality and energy independence has grown, offshore wind power generation has garnered attention, making submarine cable technology equally important, as submarine cables are an essential for transmitting power generated at sea to onshore facilities.