Reasons Why the Wire Industry Thrives Despite the Spread of COVID-19

[Asia Economy Reporter Changhwan Lee] Amid the situation where many industries are suffering damage due to the novel coronavirus infection (COVID-19), the performance of the cable industry has improved, drawing attention.

According to the related industry on the 29th, LS Cable Asia's sales and operating profit for the first quarter of this year reached 132.5 billion KRW and 7.3 billion KRW respectively, achieving the highest performance ever for a first quarter. LS Cable Asia, an affiliate of LS Cable, produces and sells power cables and optical cables in major Southeast Asian countries such as Vietnam and Myanmar.

LS Cable Asia's power cables are of excellent quality and have price competitiveness compared to overseas companies, which has led to active sales not only in the Vietnamese domestic market but also in exports, being a major factor in the performance improvement.

In particular, for high value-added optical cables, they produce products tailored to the European market with quality at the level of advanced companies, securing high value-added projects due to the expansion of the European 5G market.

Thanks to the good performance of overseas affiliates, LS Cable also continues solid results with first quarter sales of 1.1556 trillion KRW, an increase of more than 6% compared to the previous year.

An industry official said, "Despite the contraction of consumption and production due to the COVID-19 virus and the decline in copper prices, LS Cable's first quarter performance was higher than expected," adding, "Although the global economy is facing difficulties, Southeast Asia including Vietnam and Myanmar seems to have been relatively less affected, which also appears to have influenced the results."

Another cable company, Daehan Cable's separate basis sales for the first quarter were 363 billion KRW, an increase of 15.6% compared to the previous year. Operating profit turned positive to 8.2 billion KRW from a loss of 400 million KRW last year. Both sales and operating profit for the first quarter are the highest in six years since 2014.

Daehan Cable has undergone restructuring for several years due to poor management but has recently seen a clear improvement in performance with consecutive large orders. Daehan Cable recently secured ultra-high voltage cable supply projects worth a total of 63 million USD (approximately 75 billion KRW) in the Netherlands, Singapore, and Qatar.

A Daehan Cable official stated, "Despite the COVID-19 situation, overseas orders are proceeding relatively steadily," adding, "Customer trust in Daehan Cable's products and project execution capabilities is high, and continuous communication during difficult times has been the driving force behind securing orders."

This content was produced with the assistance of AI translation services.