LS Group’s Sterling Growth

Group celebrates 7th anniversary with 45 affiliates and annual sales of 19 tln won

LS Group celebrated the 7th anniversary since its separation from the LG Group on Nov. 11, with the number of its affiliates rising to 45 from four and total sales rising from 7 trillion won to 19 trillion won, the group said recently.
Three younger brothers of late LG Group founder Koo In-hoe took over four of the group’s affiliates and struck out on their own by setting up LS Group. The brothers were Tae-hoe, Py`ong-hoe and Doo-hoe and the companies they inherited included LS Cable and LS Industrial Systems.
The group started picking up small companies to expand its operation under its strategy of “small M&As.” The latest merger for the group was Hwachang Co. for 27 billion won under its plan to strengthen the recycling business, dealing with rare metal parts in electronics products and their salvage and reuse.
The group’s initial annual turnover amounted to just over 7 trillion won, but it has grown sizably to 19 trillion won last year with net profit ballooning to 574 billion won last year. The group’s total assets rose to 16 trillion won from 5 trillion won at the time of the split. The group’s market capitalization also increased since 2003 from 1.9 trillion won to 3.5 trillion won.
The group stuck to its strategy of small M&As with large potential since its start, and during the past couple of years the group took over a record 13 small companies at a total cost of 1.1 trillion won with merger costs coming to just 100 billion won for each merger. Last year, the group added LS Homchi Cable for 20 billion won and LS Mecapion for 8.8 billion won to its affiliate list, companies considered the cream of the crop in their market.
LS Homchi Cable, a Chinese company, recorded 51 billion won in sales last year and expects to record 100 billion won in sales this year. The group is ready to vie for a larger share of China’s huge electric wire market starting next year by cutting out a 24 percent share of the market. LS Mecapion, formerly Mechatronics Co., also has been able to double its monthly sales in recent months producing the servo system, a key part for mechanical robots.
Industry sources said the group takes over small companies with reduced risks while maximizing profits.
LS Cable, in the meantime, executed a series of M&As, taking over such companies as JS Cable from Jinro Co. and Superior SX Co. in the United States. LS took measures to prevent any mix up in their business lines, especially with regard to their export goods, and to maximize synergy among those new affiliates.
LS Industrial Systems took over Hokae Electric for 5.6 billion won under its plan to expand its business lines of semiconductor modules, electric and electronic auto parts and others to more than 30 percent of its total annual sales.
The group will focus on the creation of synergy from next year as the size of its new affiliates are so small that they will not be able to stand alone for long without help from other affiliates. The first step is to create a new CI for the group next year, as the group has set up a list of its new growth engines in such areas as new recycled energy, core parts for electric cars, overseas natural resources exploration and green businesses, among others.
Chairman John Koo said he would like to stress that LS pursues the development of global competitiveness by focusing on and specializing in the industrial electric, electronic and materials industries.
The major affiliates of LS, such as LS Cable, LS Industrial Systems, LS-Nikko Copper, LS Mtron, Gaon Cable, E1 and YESCO are among the nation’s top ranked companies in their respective fields. Ensuring their excellence, LS plans to grow into a global enterprise by providing the best technology and differentiated solutions for each of its customers.
LS also aims to develop into a company that provides its clients with “Leading Solutions,” contributes to society and fosters a corporate culture where employees can realize their dreams.
LS would like to become an enterprise that serves its clients with affection and respect, as well as sharing in mutually beneficial interaction. Every employee will engage in all possible efforts to make LS the most revered brand not only within the domestic market but also among its overseas clients because their core business principle, “Always With Our Customers,” allows for nothing less than that sterling effort, LS said. nw

Chairman John Koo of LS Group.