South Korean cablemaker LS Cable & System seeks to expand its business horizon to the clean energy sector by acquiring 16 percent shares in underwater construction firm KT Submarine.
LS Cable & System purchased the shares in the marine construction company for 25.2 billion won ($19.3 million) in Nov. 30, making itself the second largest shareholder after KT Group.
With a call option that the firm already decided to exercise next year, LS Cable & System is expected to become the largest shareholder.
The acquisition of KT Submarine would create synergy between the cablemaker’s production abilities and the construction firm’s engineering and vessel operation abilities to increase LS Cable & System’s competitiveness in the global market, the cable company said.
The cablemaker had mostly been outsourcing cable burials or renting cable installing ships from abroad. However, the company will no longer have to rely on external entities following the acquisition of KT Submarine, LS Cable & System said.
The acquisition comes as LS Cable & System has been expanding its business abroad, especially by partaking in eco-friendly projects.
The Korean company signed a 240 billion won deal in October and an additional 400 billion won deal in December to supply high-voltage direct current (HVDC) cables to a wind farm complex located in the Arctic Ocean, off the coast of the United Kingdom.
It has also signed an agreement to supply 350 billion won-worth of underwater cables to a wind farm in North America, while also having acquired 800 billion won-worth of rights in the past three years to supply underwater cables in Taiwan.
It is also set to cooperate with leading global wind energy production firm Orstead.
The Korean company said it projects further growth in its global business as the global industry turns toward renewable energies. It also added that it was hopeful the relatively low regulations wind energy faces in the US’ new Inflation Reduction Act will act as a catalyst to bolster its global business.
“Most renewable energies including solar and wind use HVDC cables,” said a LS Cable & System official. “The HVDC cable market’s value will grow to over 10 trillion won in the next 10 years on the back of global renewable energy policy expansions.”
