LS Cable to inject $53.3 million to set up EV parts JV with HAI

LS Cable & System Ltd. will spend 67.5 billion won ($53.3 million) to set up a joint venture with Austria’s Hammerer Aluminium Industries GmbH (HAI), the world’s No. 1 producer of aluminum parts for EVs, to develop light but strong EV parts in efforts to expand its EV business.

South Korea’s major cable manufacturer announced in a regulatory filing on Friday that it signed an agreement to build a joint venture with HAI to develop and manufacture high-strength, lightweight aluminum auto parts for electric vehicles.

It will invest 67.5 billion won to own a 100% stake, or 67,500,000 shares, in the so-called LS-HAI JV, and the Austrian partner will buy a 33.3% stake later from LS Cable & System at an undisclosed date, according to the filing.

The two companies aim to commence the mass production of high-strength, lightweight aluminum auto parts for EVs, including battery cases, in 2025. They expect the JV would rake in about 200 billion won in sales in 2027.

Both companies have been supplying auto parts to finished carmakers at home and abroad.

After years of supplying high-strength aluminum materials for combustion engine cars of Hyundai Motor Co. and Kia Corp., LS Cable & System expects the JV will help it accelerate a foray into the EV parts industry.

The latest move is also expected to create synergy with its aluminum materials-producing affiliate LS Alsco Co. The two sister companies have developed a new aluminum alloy that is strong but light. It is widely anticipated to replace copper wire in cars, especially EVs that need lighter materials for better fuel efficiency.

LS Cable & System has been seeking to restructure its business with more focus on new renewable energy and EV parts businesses.

The company has been expanding investment in aluminum materials because demand for aluminum is expected to surge in line with the rapid growth of the global EV market, said Koo Bon-kyu, president & chief executive officer (CEO) of LS Cable & System.

Write to Sungsu Bae at baebae@hankyung.com
Sookyung Seo edited this article.