LS Cable & System invests $20 mn to set up a JV with Indonesia’s AG Group

[Photo provided by LS Cable & System Ltd.]

South Korea’s leading cable manufacturer LS Cable & System Ltd. said on Monday that it will establish a 50-50 joint venture with Indonesian conglomerate Artha Graha Group (AG Group) to tap into the Southeast Asian country’s electric wire market.

Under the joint venture agreement signed on Monday at the Embassy of Indonesia in Yeouido, Seoul, LS Cable & System and AG Group will invest a total $40 million to build a power cable factory on a 64,000 square meter location near Jakarta, Indonesia, starting next month, with an aim to complete construction in the second half of 2019.

LS Cable & System said in a regulatory filing on Monday that it will purchase 280,000 shares in the joint venture dubbed PT LSAG Cable Indonesia at 21.65 billion won ($19.6 million). The stock purchase will be in the form of cash and payment in kind.

LS Cable & System said that the joint facility will produce overhead electric power lines and low and medium voltage cables used in construction and plants with an aim to generate $100 million in sales in 2025.

LS Cable & System has been seeking opportunities to make inroads into Indonesia whose economy has been growing rapidly. The latest addition has led LS Cable & System to manage a total seven production entities across Asia. It has facilities in Vietnam, China, India, and Myanmar.

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