KOC Electric’s Ulsan plant scenery. Provided by LS Electric
LS Electric announced on the 23rd that it has decided to invest 59.2 billion won by acquiring a 51% stake in KOC Electric, a domestic small and medium-sized transformer manufacturing company, at a board meeting.
In addition, the funds for this acquisition will be raised without external borrowing, such as by selling some of its own shares to LS, to ensure financial stability.
Established in 1979, KOC Electric has grown into a comprehensive transformer manufacturer with the ability to produce high-voltage transformers including mold, dry-type, and oil-immersed distribution transformers at its facilities in Busan and Ulsan.
As the only small and medium-sized company in Korea with 154kV technology and facilities, KOC Electric is among the top 5 companies in Korea that supply high-voltage transformers to KEPCO. It is also the leading domestic company in specialized power equipment, serving as the top ship-specific transformer manufacturer in Korea with major shipyards in Korea and numerous overseas shipbuilders as customers.
KOC Electric recorded sales of 95.3 billion won last year and is currently expanding its business through investments in high-voltage production capacity in response to increased energy infrastructure demands in North America, the Middle East, and elsewhere.
Following the acquisition of KOC Electric, LS Electric plans to expand its high-voltage transformer manufacturing facilities and more than double its production capacity by the end of next year. LS Electric previously decided on the 21st to expand the production capacity of its Busan plant to a level of around 400 billion won by September next year with a 20 billion won investment. After the expansion of KOC Electric is completed, LS Electric will have a high-voltage transformer production capacity of up to 500 billion won by 2026.
An official from LS Electric stated, “By acquiring a strong and substantive small and medium-sized company with the highest technology in Korea, we will be able to maximize synergy in the high-voltage transformer business,” adding, “Through cooperation with KOC Electric, we will proactively respond to the rapidly expanding overseas market and enter a trajectory of accelerated growth together.”