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U.S., China Demand Set to Boost LS Cable Sales 30% in 2011

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April 27 (Bloomberg) -- LS Cable & System Ltd., South Korea’s biggest wire and cable maker, expects sales to jump 30 percent this year as demand increases in overseas markets including China and the U.S., President Son Jong Ho said.

The company, a unit of LS Corp., expects total sales to climb to about 10 trillion won ($9.3 billion) from 7.7 trillion in 2010, Son, also a co-CEO of the Anyang, South Korea-based firm, said in an interview yesterday.

Global cable makers may benefit from increased spending by China on power networks and the faster upgrading of international transmission lines after the nuclear crisis in Japan, Seoul-based Kiwoom Securities Co. said in an April 25 report. LS Cable wants to become the world’s biggest maker by 2015 through expansion overseas, outstripping Italy’s Prysmian SpA and Paris-based Nexans SA, Son said.

“Demand in the global cable market will show continuous growth this year, although the Middle East may slow down due to the unrest,” Son said. “Energy use will continue growing in China and India as cities urbanize. The outlook for the U.S. market is bright as demand to replace old power cables will increase.”

LS Cable expects operating profit to climb about 15 percent this year, he said, without giving figures. LS Corp., which has other units including LS-Nikko Copper Inc., has advanced 30 percent in Seoul trading over the past year, outperforming a 26 percent gain in the benchmark Kospi index.

Renewable Energy

“We expect undersea cable demand to rise as the nuclear crisis in Japan will prompt more investment in renewable energy, especially wind power,” Son also said. “Increasing electric car production will boost demand for electric vehicle quick-chargers and the growing number of smart phone users should increase the need for new telecommunication lines.”

LS Cable plans to invest about $60 million through Atlanta-based Superior Essex Inc. to build a power cable plant in North Carolina to begin production in 2012 and is spending $36 million to add a plant in India, it said in April. LS Cable may invest more in the U.S. unit to boost output and may build a power cable plant in Europe, Son said, without elaborating.

“Since it’s hard to expect fast growth in the Korean market, LS Cable needs to seek growth in foreign markets,” Kim Ji San, a Kiwoom analyst, said today. “The company is going in the right direction by expanding into faster-growing markets.”

As production increases, LS’s requirement for copper including overseas units’ needs may climb about 10 percent next year from 550,000 metric tons this year, he said.

In the face of high copper prices, LS Cable and its rivals in Asia are likely to increase use of aluminum as they seek cheaper alternatives, Son said.

Copper, used to make wires, cables and pipes, advanced 26 percent in the past year in London. Three-month delivery copper dropped 1.3 percent to $9,418 a ton as of 7:15 p.m. Seoul time, while aluminum was little changed at $2,746.50 a ton.

To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net.

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net