Some Korean Firms to Benefit from Trump’s Presidency

https://korean-electronics.com//inquiryMost Korean companies have worried about U.S. protectionist measures after the inauguration of President Donald Trump. But a few expect benefits from his administration that plans to increase investments in infrastructure.

LS Cable & System said recently it will start producing 10.3 kilometers of submarine cables in April to supply the the New York Power Authority (NYPA). The company said it also plans to expand its investment in the U.S. market to keep up with the potential growing demand in tandem with the U.S. government’s expansionary policies.

“We expect that the Trump administration’s policy to expand investment in infrastructure will boost power cable demand in the United States to replace obsolete ones,” an LS Cable official said. “Accordingly, we are considering more investments in the U.S. market.”

According to the company, its submarine cables will replace old cables laid at the bottom of Lake Champlain, which is between New York State and Vermont. The old cables were installed in 1958 and 1970.

LS Cable reached a deal with the NYPA to join the $47 million project in January 2016. The new cables will be installed between September and December this year. LS Cable in 2006 became the first Korean company to provide extra-high-voltage cables for the U.S. market.

During Trump’s presidential election campaign, he pledged to pour $1 trillion into reinforcing national infrastructure such as highways, bridges and tunnels. Doosan Group, which has suffered liquidity problems in recent years, would be happy with this news.

Doosan Bobcat is expected to be one of the biggest beneficiaries as the world’s leading small-sized construction equipment maker is already generating about 70 percent of its sales in the North American market. Market expectations are that the policy, once realized, will generate extra demand worth more than $17 billion for Doosan Bobcat.

In addition, Trump has promised to drop the federal corporate tax rate to 15 percent, down from 35 percent as it is now. Doosan Bobcat and its parent company Doosan Infracore will benefit further if his election pledge comes true.

Besides its global headquarters in Korea, Doosan Bobcat operates its main manufacturing base in North Dakota in the USA. It was acquired by Doosan Infracore in 2007, helping Doosan expand its manufacturing and sales channels to North America, China and Europe. Doosan Bobcat posted 4.4 trillion won ($39.2 billion) in sales and 385.6 billion won in operating profit last year. Doosan, however, remained cautious about the rosy expectations as it is uncertain if the Trump administration will keep all its pledges.

Korea Aerospace Industries (KAI) is also expected to benefit from Trump in its bid to provide its T-50A trainer jet for the U.S. Air Force, thanks to its partnership with Lockheed Martin. The U.S. firm has been friendly with Republicans. It is known to have paid $1.88 million in political support for Trump during his presidential election campaign.

The U.S. Air Force is pushing for an advanced pilot training project, investing more than $15 billion to replace its 350 T-38 trainer aircraft. The Lockheed Martin-KAI consortium is competing with the Boeing- Saab alliance in this bidding.

<Source:KITA>

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