"Incentives Galore" Vietnamese Company Sends Multi-Billion Won Love Calls to Korea

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The Vietnamese government and state-owned enterprises have directly sent a love call to LS Cable & System in Korea.

According to industry sources on the 27th, the Vietnam Electricity (EVN) and the state-owned oil and gas company PetroVietnam (PVN) recently visited Korea and expressed their strong support for establishing a submarine cable manufacturing plant of LS Eco Energy in Vietnam. They even prepared a factory perspective drawing themselves, showing a strong willingness to cooperate.

A bird's-eye view of the LS Eco Energy submarine cable factory produced by PTSC, a subsidiary of PetroVietnam (PVN) Group, Vietnam's largest state-owned energy company. Provided by LS Cable & System

The Vietnamese government is promoting the introduction of nuclear power and the expansion of offshore wind power. Once these projects are in full swing, LS Cable & System and its subsidiary LS Eco Energy are expected to secure power grid construction projects worth several hundred billion won.

LS Cable & System holds the number one market share in the Vietnamese power market. It supplies underground and submarine cables essential for building power grids throughout Vietnam. LS-VINA, LS Cable & System’s local subsidiary, produces underground cables, LS Eco Energy manufactures submarine cables, and LS Marine Solution is responsible for installation and construction. They are pursuing a strategy to expand their business throughout Southeast Asia by using Vietnam as a production base.

Against this backdrop, Nguyen Hong Dien, Minister of Industry and Trade of Vietnam, who recently visited Korea, met with LS Group officials and promised, "We will spare no effort to provide active support in all aspects, from legal and institutional backing to incentives, for promoting business in Vietnam." He especially emphasized, "There will be significant investment in the eco-friendly energy sector," and stated, "Cooperation with LS is a very wise decision."

A notable point is that the Vietnamese state-owned enterprises even prepared a factory perspective drawing for LS Cable & System. PTSC, a subsidiary of PetroVietnam, presented the factory perspective drawing of LS Eco Energy at the LS Group meeting. This signifies not just a simple investment attraction but an intention to make LS a key partner in Vietnam’s energy industry.

The 'Phu My Industrial Complex' on the southern coast is being strongly considered as the site for the new factory that LS Eco Energy will build. Submarine cable factories are typically built on coastal areas where logistics costs can be reduced and underwater testing is easier. Once Vietnam’s nuclear power projects and offshore wind power expansion are in full swing, submarine cables produced at this factory are expected to be supplied on a large scale.

The Vietnamese government plans to expand power generation capacity to 150GW by 2030. Minister Nguyen reportedly emphasized during the meeting with LS Group that "submarine cables are an essential element in this project." Nuclear power plants require underground cables, and expanding offshore wind power necessitates submarine cables. LS-VINA and LS Eco Energy are highly likely to become the main suppliers, respectively.

Additionally, Minister Nguyen promised to guarantee rare earth supply to LS Eco Energy. Vietnam ranks second in the world with rare earth reserves of 22 million tons. However, the government strictly manages mining rights, so production volume is not large. Securing a rare earth supply chain is expected to strengthen LS Eco Energy’s 'permanent magnet business.'

Meanwhile, during their visit to Korea, Vietnamese government and enterprise officials inspected LS Cable & System’s Donghae plant and further discussed cooperation plans. Located in Donghae City, Gangwon Province, the plant is the largest in Asia, producing ultra-high voltage submarine cables and ultra-high voltage direct current (HVDC) cables, which are exported worldwide to the United States, Europe, and Asia.