LS Electric is reshaping its business strategy in Taiwan, moving beyond its traditional focus on power equipment sales to pursue larger infrastructure projects through a newly established local joint venture with affiliates of Formosa Plastics Group.
The Korean power equipment and energy solutions provider said on Oct. 7 that it had signed an agreement with Taiwan-based Nan Ya Plastics and KHI to establish a joint venture dedicated to power business in Taiwan.
The new company, named Nan Ya Le Xing (南亞樂星), will be jointly owned by LS Electric, Nan Ya Plastics and KHI. LS Electric will hold a 50% stake, while Nan Ya Plastics and KHI will own 40% and 10%, respectively.
The partnership is designed to transform LS Electric’s position in Taiwan from a supplier of power equipment into a more comprehensive project partner capable of handling engineering, bidding and technical support locally.
The joint venture will initially focus on securing power infrastructure projects in Taiwan and building the capabilities needed to respond quickly to local customers. LS Electric’s expertise in power equipment manufacturing and engineering will be combined with Nan Ya Plastics’ local manufacturing infrastructure and EPC network.
The move comes as Taiwan accelerates investment in its electricity infrastructure amid the country’s transition toward renewable energy.
Taiwan is pursuing a carbon-neutrality strategy that calls for renewable energy to account for as much as 70% of its overall power mix by 2050. The transition is expected to drive demand for power infrastructure capable of integrating renewable generation while maintaining grid stability.
Investment opportunities are emerging across areas including environmentally friendly power equipment, energy storage systems and digitally enabled smart grids. For power equipment companies, the market is increasingly shifting from individual equipment supply toward integrated solutions and infrastructure projects.
LS Electric’s new joint venture is positioned to capitalize on that shift by combining its technology with local market access.
Nan Ya Plastics, a key affiliate of Formosa Plastics Group, is Taiwan’s largest petrochemical and electronic materials and products company. The company has also been expanding its power solutions business, moving beyond distribution equipment into areas such as extra-high-voltage transmission equipment and power grid stabilization.
KHI, another partner in the venture, was established through an investment by Formosa Plastics Group to commercialize promising technologies developed through research with KAIST. KHI has invested in the joint venture based on its assessment of LS Electric’s competitiveness and growth potential in the global power industry.
The new venture builds on a memorandum of understanding signed by LS Electric and Nan Ya Plastics in March last year covering cooperation in environmentally friendly power equipment and energy-efficiency solutions.
Their partnership had initially centered on the supply of power equipment. The establishment of the joint venture expands the relationship into engineering and project-based business, allowing the companies to pursue local contracts together.
Industry observers say the partnership reflects LS Electric’s intention to make Taiwan a strategic market for its power infrastructure business rather than simply an overseas sales destination.
The joint venture could also give LS Electric greater access to local projects and improve its ability to respond to customer requirements by combining Korean technology with Taiwan-based production and EPC capabilities.
An LS Electric official said the company expects the joint venture to elevate its Taiwan business from equipment supply to engineering-based project contracts.
“We expect the combination of the two companies’ capabilities to enable us to achieve early results in Taiwan’s power infrastructure project market,” the official said.
