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Underwater cables

Rising demand for underwater cables keeps LS Cable busy round the clock

Nov 18, 2020 (Gmt+09:00)

DONGHAE, Gangwon Province -- On a winter’s day in Donghae, Gangwon Province, some 250 km northeast of Seoul, LS Cable & System Ltd. workers are busy loading bulky high-voltage cables that look like big rattlesnakes onto a ship bound for Taiwan.

The underwater cables, shipments of which began in June, will be used for a Taiwanese government project to build a 5GW offshore wind power farm complex.

“We’re receiving a whopping amount of orders,” an LS Cable official told The Korea Economic Daily on Nov. 17.

“We built a second plant in April. All facilities are in full operation. Still, we are struggling to meet growing demand.”

LS Cable workers near Donghae Port moving underwater cables for shipment to Taiwan

He said the company is manufacturing dozens of additional turntables, storage cases for high-voltage cables, on increasing demand for underwater cables.

LS Cable, South Korea’s largest wire and cable manufacturer, is among the five to six global cable makers that can make high-voltage submarine cables.

LONG-DISTANCE CABLES

The company is known globally for its long-distance and high-pressure cables, giving it a key competitive edge in the growing underwater high-voltage cable market. Demand for such cables is rising at a fast rate as offshore wind farms are gaining momentum for the production of renewable energy to combat environmental pollutions.

Most cable makers are producing tens of kilometers-long cables by connecting shorter ones (approximately 2 km long) to make it easier to replace a faulty section. Otherwise, the lengthy cables must be scrapped completely if any section has a problem in power transfer.

LS Cable also used to make its submarine cables like its competitors, but recently it changed its manufacturing technology to produce lengthy cables in a single trunk to minimize the loss of power in transmission.

The bulky underwater cables are often as thick as a human body.

“Submarine cables have to be thick enough to endure the tough sea currents and to prevent corrosion and disconnections,” said Kim Hyung-joon, an LS Cable manager.

Finished products are sent to Donghae Port from the LS Cable plant through an underground tunnel.

INCOMING ORDERS

Even amid the pandemic, the company was able to win contracts from clients around the world. Last year, it won a 500 billion won ($452 million) order from Taiwan, followed by a 100 billion won deal from Bahrain in March of this year. LS Cable is expected to sign a long-term contract with a global offshore wind power firm soon.

LS Cable said its production of underwater cable has increased two-and-half-fold due to growing demand. With its order backlog of close to 1 trillion won at the end of October, the company is expected to emerge as the world’s fourth-largest submarine cable manufacturer by year-end.

LS Cable's underwater cables on an offshore facility near a wind power farm in the US


EARNINGS BOOST ON DEMAND SURGE


Rising demand is also boosting earnings.

LS Cable’s revenue and operating profit in the first nine months of this year rose 4.1% and 1%, respectively, from the same period a year earlier.

LS Cable Asia, its subsidiary operating in Vietnam and Myanmar, saw its third-quarter sales rise 8% from the second quarter. Its operating profit soared by more than ninefold in the cited period.

DIVERSIFYING BUSINESS

LS Cable is also diversifying its cable and wire business to meet the needs of various industries.

The company said earlier this month that it has developed a new optical cable that can ward against data breaches, hacking and tapping of information.

In September, the company commercialized a premium telecommunication cable with carbon fiber, which is 20% lighter but 30% more flexible and durable than a fiber-optic cable. LS Cable has also unveiled a CCTV cable that enables simultaneous power and data transmissions.

“We expect to see significant demand growth in underwater cables, particularly in the US, in line with the development of offshore wind power complexes,” said LS Cable Chief Executive Myung Roe-hyun. “The real battle for such cables has just begun.”

Write to Su-Bin Lee at isb@hankyung.com

In-Soo Nam edited this article.

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