LS Group is launching a new entity with a revenue target of 1.3 trillion won by integrating its metal raw material procurement and processing operations. This consolidation aims to enhance cost competitiveness while allowing LS Electric to focus on power infrastructure investments.
On November 5, LS Corporation announced that its subsidiary LS Global will acquire the copper and stainless steel processing business of LS Metal, a subsidiary of LS Electric, to establish 'LS Metal Plus.' The new entity is expected to officially launch on January 1, following approval of the name change at an extraordinary shareholders' meeting in December.
This integration will combine LS Global's raw material procurement and trading operations with LS Metal's manufacturing capabilities, creating a streamlined structure that manages the entire process from raw material purchasing to processing, production, and sales.
LS plans to enhance its purchasing power through consolidated procurement of copper, aiming to improve inventory management and streamline copper futures and hedging operations. This strategy is designed to increase responsiveness to raw material price fluctuations and reduce operational costs, thereby improving profitability.
Given that raw material prices and procurement costs significantly impact profitability in the metal processing business, the integration of purchasing and inventory management functions is crucial for securing cost competitiveness.
LS Electric will channel the resources gained from this acquisition into its power infrastructure business. The company plans to expand production capacity and increase investments in core areas to meet the rising global demand for power equipment while also aiming to reduce reliance on external borrowing.
LS Corporation will participate in a capital increase of approximately 150 billion won to support LS Global's business expansion. The projected revenue for the integrated entity, LS Metal Plus, is around 1.3 trillion won, with total assets estimated at about 1 trillion won.
LS Group aims to develop LS Metal Plus as a key platform for metal trading and processing, enhancing corporate value through improved operational efficiency among its subsidiaries.
* This article has been translated by AI.
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