LS Electric targets 50% output boost at Vietnam plant
HANOI, Vietnam ― LS Electric aims to boost production capacity by 50 percent to $60 million at its facility in the city of Bac Ninh, just east of Hanoi, Vietnam, by expanding output for battery control panels and electrical protection devices. This strategic initiative is part of LS Electric CEO and Chair Koo Ja-kyun's commitment to Southeast Asia, the world's second-largest market for electric power systems after North America.
'(On July 14,) Koo approved the construction project for a three-story building at the Bac Ninh plant,' said Choi Jong-hoon, general director of LS Electric Vietnam, during a group interview last Wednesday. 'The site will focus on the efficient manufacturing of mass-produced items, including battery control panels for Samsung SDI and air circuit breakers.'
Battery control panels are control units designed to monitor and control battery voltage and protect battery systems in energy storage system products such as Samsung SDI's Samsung Battery Box. Air circuit breakers are devices that prevent abnormal electrical flow within power distribution systems used in industrial plants, commercial buildings, data centers and other facilities.
According to Kim Sung-ho, technical director of LS Electric Vietnam, the Bac Ninh site seeks to increase its capacity from $40 million in 2022 to $60 million after completing the production expansion. Notably, it will manufacture approximately 10,000 air circuit breakers annually, spurred by recent investments from LS Electric's global competitors in Vietnam's electrical device market.
Following the capacity growth, the facility will hire around 100 additional workers, increasing total employment to 500. As of May, it has 372 employees, with plans to expand to 400 by 2026.
'Starting with 20 billion won ($14.4 million) sales revenue in 2020, the Vietnam unit is set to achieve roughly 200 billion won this year,' noted Choi. 'In addition to the expansion project for the existing (Bac Ninh) plant, we are exploring the construction of additional facilities in Vietnam. Our goal is to reach $300 million in revenue by 2030.'
Choi highlighted that the Vietnamese base is at the forefront of catering to the rapidly evolving global trend toward integrated energy solutions and high-value service offerings beyond production and sales. It already exports 60 percent of its production output to Saudi Arabia, the United Arab Emirates, Kazakhstan, Brazil, Kenya and other countries. As a member of the Association of Southeast Asian Nations, Vietnam also benefits from exemptions on intraregional export tariffs.
Previously, it had focused on high-end power distribution panels as well as low-voltage power equipment. It supplied electric power solutions for South Korean companies' commercial buildings in Hanoi, including the Lotte Mall, Lotte Center and Landmark 72.
In addition to Samsung SDI, the plant currently supplies LG Group factories in the Haiphong industrial park as well as utility company Electricity of Vietnam Ho Chi Minh City and Vingroup, Vietnam's largest conglomerate.
One of the standout features of the Bac Ninh plant is how it uses flow production to maximize production efficiency, Kim noted. Unlike LS Electric's Cheongju facility in North Chungcheong Province, the site has few partner companies with which it can outsource manufacturing and support services.
In the assembly line for battery control panels, the production team, identified by their green hats, manages the cabling for power connections in energy storage systems and places the modular components in pallets. Inspectors in yellow hats then determine whether they can proceed to the next stage and finally be attached to ESS products. These modules are designed to seamlessly integrate into the overall production process, enhancing time and cost efficiency while allowing for easy customization.
Established in 1997, LS Electric's production facility in Dong Anh, inside Hanoi, relocated east of the city to Bac Ninh in 2022, expanding its capacity. Currently holding 40 percent market share in Vietnam's low-voltage power equipment sector, LS Electric Vietnam aims to capitalize on the Vietnamese government's renewable energy initiatives under its eighth Power Development Plan, which seeks to develop smart grids for modernizing power distribution systems.
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