'Owner vs. Owner's Right-hand man'...LS Cable & System vs. Taihan Cable & Solution Who Wins?

[Korea Financial Times, Shin Haeju] Competition between Korea's leading wire companies LS Cable & System and Taihan Cable & Solution is expected to become more intense. The battlefield is the submarine cable market. This is because the trend of expanding offshore wind power among new and renewable energies, and the development of submarine interconnection projects for power grid connection between countries (supergrids) are continuing.

Leading the way are LS Cable & System President Koo Bon-gyu and Taihan Cable & Solution Vice Chairman Song Jong-min. LS Cable & System is led by its owner, while Taihan Cable & Solution is led by a professional executive who has been trusted by its owner for 25 years.

Both companies are building new submarine cable factories, with LS Cable & System making its bold move in the U.S. and Taihan Cable & Solution placing its bet domestically.
Submarine cables are cables that transport power below the sea surface and require advanced technology as they must be built to withstand strong currents and temperatures.

There are only two companies in Korea, LS Cable & System and Taihan Cable & Solution, that can develop and produce these submarine cables and provide them as a 'turnkey solution' including transportation, construction and maintenance.

LS Cable & System is carrying out the so-called ‘Project Genesis’ led by its third-generation CEO, Koo Bon-gyu. It contains Koo Bon-gyu’s strategy to grow the submarine business through global localization by creating a submarine cable production base in the United States.

CEO Koo is the eldest son of LS Cable & System Chairman Koo Ja-Yeop.

He joined LS Cable & System's U.S. subsidiary in 2007 and has been taking management classes for 20 years, progressing through the owner's elite course. He experienced not only LS Cable & System, but also LS Electric, LS Mtron, and other major affiliates of the group, and was appointed CEO of LS Cable & System, where his father is, in 2022.

LS Cable & System chose the United States as its second market because it has the largest growth potential for offshore wind power in a single country.. The U.S. plans to increase its offshore wind usage from just 42 megawatts (MW) today to 115 gigawatts (GW) by 2050. 1GW is 1,000 MW, which means increasing the electricity supplied by offshore wind power by 274 times over the next 25 years.

As the export environment has become difficult due to protectionism in major countries such as the U.S. and Europe and rising logistics costs, there is also a desire to eliminate geographical obstacles by building factories directly in overseas locations.

LS Cable & System, through its U.S. subsidiary LS Greenlink, has directly verified more than 60 submarine cable factory construction sites from Massachusetts to Florida.

As a result, since July last year, it has been building a 20,000-pyeong submarine cable factory, the largest in the region, with an investment of KRW 1 trillion on the banks of the Elizabeth River in Chesapeake City, Virginia, eastern United States. It aims to complete construction in 2027 and mass production in 2028. By 2030, the company plans to achieve KRW 1 trillion in cumulative sales.
CEO Koo Bon-gyu said, “We are actively meeting with U.S. senators and representatives to explain why we are beneficial to the U.S.,” and “We are also continuously networking.”

Led by Song Jong-min, vice chairman of Hovan Industries, Taihan Cable & Solution is focusing on building a domestic production base. Specifically, it is building a cluster of submarine cable production bases in Dangjin, Chungnam.

Vice chairman Song Jong-min is known as the right-hand man of Hovan Group founder and chairman Kim Sang-yeol. Mr. Song joined Hovan Construction in 2000 and has been in charge of group financial accounting and management since then.

In particular, he oversaw group mergers and acquisitions (M&A) and managed subsidiaries, and in 2012, he moved to KBC Gwangju Broadcasting, which was acquired by the group, and served as an executive director. He also led the integration process after the acquisition of Taihan Cable & Solution, and was appointed CEO of Taihan Cable & Solution in May 2023.

Taihan Cable & Solution currently owns the first submarine cable factory at the site behind the Godae pier at Dangjin Port in Pyeongtaek, Chungcheongnam-do. The first phase of the plant was completed in May last year, and its current uptime is 3144 hours. This is more than LS Cable & System's Donghae plant.

The first phase of the plant produces internal network submarine cables connecting offshore wind turbines and generators, and generators and offshore substations. The second phase of the first plant is expected to be completed in the first half of this year. The second phase of the plant will make external network submarine cables connecting offshore and onshore substations.

Taihan Cable & Solution is currently building a second submarine cable plant in the Godae district of Asan National Industrial Complex in Dangjin. It will invest KRW 1 trillion to complete the second plant by 2027. The second plant will be built to produce submarine cables for external networks and 620-kilovolt (kV) high-voltage direct current (HVDC) cables.

Vice Chairman Song Jong-min emphasized, “Dangjin, Chungcheongnam-do, is an area with a high concentration of domestic production infrastructure for Taihan Cable & Solution, as well as a logistics and transportation center, making it an optimal location to supply submarine cables to domestic and overseas markets.”

Shin Haeju (hjs0509@fntimes.com)