LS Electric scales up Vietnamese plant to tap into Asean potential

LS Electronic is gearing up for a massive increase in business in the Asean region, with its factory on the outskirts of Hanoi, Vietnam, at max production capacity for its power distribution solutions.

A worker produces switchgears at LS Electric's manufacturing plant in Bac Ninh, the outskirts of Hanoi, Vietnam. [SARAH CHEA]

BAC NINH, Vietnam — Hundreds of towering power systems, each taller than a human, stand in neat rows across the shop floor, marked with signs indicating their destinations — traveling across continents to Saudi Arabia and Kazakhstan.

The operation at LS Electric’s plant on the outskirts of Hanoi, Vietnam, runs with quiet precision: Workers in green helmets handle assembly, those in yellow inspect the finished units and overseeing them all are the red-helmeted supervisors. Only after two rounds of inspection are the machines cleared for shipment.

“These switchgears will be shipped to Samsung and LG plants right away,” said Kim Sung-ho, technical director of LS Electric’s Vietnamese subsidiary, during a press tour of the factory on July 14. “We have already secured full orders for this plant’s full capacity.”

Choi Jong-hoon, center, head of LS Electric's Vietnamese subsidiary, inspects the company's switchgear plant in Bac Ninh, Vietnam. [LS ELECTRIC]

The 30,000-square-meter (322,917-square-foot) plant, opened in October 2022, manufactures a wide range of power distribution solutions, including switchgear and power converters. Switchgears, often referred to as the "heart" of power infrastructure, serve as the central control system for entire electrical networks, overseeing the distribution, switching, and metering of electricity.

LS Electric was one of the first Korean companies to enter Vietnam in the mid-1990s and has been operational there since with around 40 percent market share. It established a manufacturing facility in Hanoi in 1997, which relocated to Bac Ninh in 2022 with an investment of $20 million.

At the far end of the Bac Ninh plant lies an unused plot of land, quietly enclosed by a long row of mango trees. Though not expansive, the land is flat and well-suited for development — it is here that LS Electric plans to build a new plant.

“Chairman Koo Ja-kyun approved the expansion during his recent visit to the site,” Choi Jong-hoon, head of LS Electric’s Vietnamese subsidiary, told Korean reporters on Thursday. “The new facility at the Bac Ninh plant will be dedicated to mass production of key products such as battery control panels [BCPs] and air circuit breakers [ACBs]."

“With the current production capacity already maxed out, LS Electric may need to consider establishing an additional plant in the future to meet its strategic goals in the Asean market.

Idle land in LS Electric's Bac Ninh plant in Vietnam, which will be used for expansion. [SARAH CHEA]

Workers produce power systems at LS Electric's manufacturing plant in Bac Ninh, the outskirts of Hanoi, Vietnam. [SARAH CHEA]

BCPs play a critical role in ensuring the safe, efficient, and reliable operation of batteries by precisely monitoring and managing key parameters such as voltage, current, and temperature. Samsung SDI is the biggest client for BCPs for LS Electric.

LS Electric also aims to ramp up its annual capacity to 10,000 ACBs, following Mitsubishi’s recent announcement to expand ACB production at its Vietnam facility.

With the plant expansion, Bac Ninh plant’s production capacity is expected to increase from $40 million to $60 million. The work force, currently numbering 372 employees, is projected to grow to around 400, including a dedicated team of 60 engineers focused on design and development.

Switchgears are placed at LS Electric's manufacturing plant in Bac Ninh, the outskirts of Hanoi, Vietnam. [SARAH CHEA]

“Because our biggest strength is designing solutions tailored to customer needs, design capabilities are essential,” Kim said. “We plan to establish a research and development center in Hanoi by 2027 to make it the hub for our business expansion to Asean.”

The 10 member states of the Asean group represent a combined GDP roughly twice that of Korea and a population of approximately 640 million, accounting for 8.8 percent of the global total. The region is widely regarded as a market larger than the European Union.

The sales of LS Electric’s Vietnamese subsidiary, which stayed at 20 billion won ($14 million) in 2020, are expected to surge 10-fold to 200 billion won in 2025. It has been involved in several major state-run projects in Vietnam over the years, including Hanoi’s Landmark 72 in 2009 and the Mong Duong 1 Power Plant in 2012.

BY SARAH CHEA [chea.sarah@joongang.co.kr]