LS ELECTRIC’s acquisition of KOC Electric has proven to be a transformative move in strengthening the company’s position in the global energy market. By strategically investing in expanding KOC Electric’s ultra-high-voltage transformer production capacity, LS ELECTRIC has significantly enhanced its ability to meet the rising demand for high-performance energy infrastructure. This expansion marks an important milestone in the partnership between LS ELECTRIC and KOC Electric and has tripled their collective production capacity for ultra-high-voltage transformers, including improvements in LS Electric production capacity. This increase in LS Electric production capacity positions both companies to capture more market share in the global power and energy sectors.
As LS Electric production capacity continues to grow, both companies are poised to lead the industry in innovation and sustainability.
Expansion of KOC Electric’s Ultra-High-Voltage Transformer Production Facility
The enhanced LS Electric production capacity directly aligns with the industry’s shift towards more efficient energy solutions.
With this robust LS Electric production capacity, the companies can now meet the energy demands of various sectors.
The surge in LS Electric production capacity will meet the rising demand for high-voltage transformers.
This investment reflects LS Electric production capacity growth, ensuring its competitive edge in the market.
The foundation of KOC Electric is built on enhancing LS Electric production capacity for future needs.
As the demand grows, LS Electric production capacity becomes critical in delivering quality products.
This specialized production will boost LS Electric production capacity and cater to market demands.
KOC Electric is enhancing its operations to ensure LS Electric production capacity can meet global standards.
By focusing on LS Electric production capacity, the company aims for a stronger market presence.
The expansion aligns with the goal of increasing LS Electric production capacity to meet future challenges.
On December 9, 2023, LS ELECTRIC celebrated a major achievement when KOC Electric officially completed the expansion of its ultra-high-voltage transformer production facility located at its Ulsan plant. The opening ceremony, which marked the first production of 154kV transformers from the newly expanded facility, was attended by key figures including LS ELECTRIC Chairman Koo Ja-Kyun and KOC Electric President Kim Ho-Ryang, alongside other executives from both companies. This event was a testament to the successful collaboration between LS ELECTRIC and KOC Electric and their shared vision of meeting the growing energy demands of the global market.
This strategic plan will emphasize LS Electric production capacity as a priority for growth.
Leadership recognizes that enhancing LS Electric production capacity is crucial for future success.
This expansion has allowed LS Electric production capacity to significantly increase, enabling both companies to respond effectively to the surging global energy demands.
The focus on LS Electric production capacity is integral to the companies’ long-term strategies.
KOC Electric invested a substantial amount of KRW 29.6 billion to build a new production facility, covering an area of 4,621m² (approximately 1,398 pyeong). This new facility is equipped with state-of-the-art technology and is capable of testing and manufacturing high-performance transformers that are rated for 345kV, which is a higher voltage rating than the previously produced 154kV transformers. This expansion has enabled KOC Electric to broaden its product range from 154kV to 230kV ultra-high-voltage transformers, significantly increasing its production capacity.
Increased LS Electric production capacity will ensure readiness for the electrification demands of the future.
The alignment of market trends with LS Electric production capacity will drive future growth.
Enhanced LS Electric production capacity is key in responding to the evolving market dynamics.
Before the expansion, KOC Electric’s annual production capacity for ultra-high-voltage transformers was valued at around KRW 30 billion. With the addition of this new facility, the company’s production capacity has now soared to over KRW 100 billion annually—more than tripling its original output. This increase in production capacity aligns with the increasing global demand for high-voltage transformers, particularly in rapidly growing regions like North America, Europe, and the Middle East.
This key step in increasing LS Electric production capacity will lead to more sustainable energy solutions.
The Role of KOC Electric in the Energy Sector
Founded in 1979, KOC Electric has built a strong reputation as a leading manufacturer of ultra-high-voltage transformers, molded transformers, dry-type transformers, and oil-immersed distribution transformers. The company operates facilities in Busan and Ulsan and has grown to become one of the top five suppliers of ultra-high-voltage transformers to KEPCO (Korea Electric Power Corporation), a key player in South Korea’s energy infrastructure.
KOC Electric is also the only small- and medium-sized enterprise (SME) in Korea with the technology and facilities required to produce 154kV transformers, positioning it as a vital player in the nation’s energy sector. In addition to its dominance in the ultra-high-voltage transformer market, KOC Electric is also the leading manufacturer of ship-specific transformers in South Korea. The company has established a strong customer base among the country’s Big Three shipbuilders—Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering, and Samsung Heavy Industries—as well as several international shipyards.
KOC Electric’s diverse portfolio spans multiple applications, from marine energy solutions to land-based power systems and ultra-high-voltage energy infrastructure. This broad expertise has allowed KOC Electric to cater to a wide variety of customer needs, making it a key player in both the domestic and international energy sectors.
In 2022, KOC Electric reported sales of KRW 95.3 billion, reflecting its strong position in the energy market. With the rising demand for energy infrastructure, especially in regions such as North America, Europe, and the Middle East, KOC Electric is focusing on expanding its ultra-high-voltage transformer capacity to meet these needs. The company aims to increase its export ratio from the current 10% to 40% by 2026, further strengthening its position in the global market.
Strategic Implications of the Expansion for LS ELECTRIC
The expansion of KOC Electric’s ultra-high-voltage transformer production facility represents a strategic win for LS ELECTRIC, as it solidifies their commitment to targeting global markets. Through the acquisition of KOC Electric and its subsequent expansion, LS ELECTRIC has not only increased its own manufacturing capacity but also gained access to KOC Electric’s established infrastructure and customer base. This collaboration has the potential to generate significant synergies and create new growth opportunities for both companies in the ultra-high-voltage and renewable energy markets.
As part of LS ELECTRIC’s ongoing efforts to expand its high-voltage transformer business, the company plans to enhance its own high-voltage transformer production capabilities at its facility in Busan by the end of 2024. This will allow LS ELECTRIC to consolidate its production resources and increase its overall high-voltage transformer manufacturing capacity. By 2026, LS ELECTRIC aims to achieve a combined annual high-voltage production capacity of KRW 700 billion, cementing its position as a major player in the global high-voltage transformer market.
Statements from Leadership
Chairman Koo Ja-Kyun of LS ELECTRIC emphasized the importance of the expansion, stating, “KOC Electric has successfully completed its expansion, allowing us to jointly address both domestic and international ultra-high-voltage market demands and create synergies. This investment is not about short-term market booms but about securing sustainable market dominance. It marks the first step in our journey to conquer the global market together.”
This statement underscores LS ELECTRIC’s long-term vision for the partnership with KOC Electric. The focus is not merely on short-term gains but on building a robust, sustainable presence in the global energy infrastructure market. The investment in expanding ultra-high-voltage transformer production is a clear indication that LS ELECTRIC is positioning itself to meet the growing global demand for high-performance power solutions, while also ensuring that it remains competitive in an increasingly dynamic and complex market.
Future Growth and Market Demand
The demand for ultra-high-voltage transformers and other critical energy infrastructure components is expected to rise significantly in the coming years, driven by factors such as increasing energy consumption, the global shift towards renewable energy sources, and the need for more resilient and efficient power grids. Ultra-high-voltage transformers play a vital role in the transmission of electricity over long distances, making them essential for the global energy transition.
As countries around the world invest in upgrading their energy infrastructure, particularly in emerging markets in North America, Europe, and the Middle East, the demand for ultra-high-voltage transformers will continue to rise. This presents a significant growth opportunity for LS ELECTRIC and KOC Electric, as they are now better equipped to meet these demands through their expanded production capabilities.
LS ELECTRIC’s strategic move to enhance its high-voltage transformer production capacity, combined with KOC Electric’s increased manufacturing capabilities, puts both companies in a strong position to take advantage of this growth. The companies will be able to offer a broader range of products to meet diverse customer needs, while also capitalizing on their global networks to expand their market reach.
KEY POINT
The expansion of KOC Electric’s ultra-high-voltage transformer production facility is a key step in LS ELECTRIC’s strategy to solidify its position in the global energy market. By increasing its production capacity and enhancing its ability to meet growing global energy infrastructure demands, LS ELECTRIC and KOC Electric are well-positioned to drive innovation and leadership in the energy sector. This partnership marks the beginning of a new chapter in the companies’ journey to capture a larger share of the global ultra-high-voltage transformer market, ensuring that they can continue to serve their clients and contribute to the world’s energy transition in a sustainable and impactful way.
