SEOUL, KOREA - LS Mtron Ltd., a manufacturer of industrial machinery and electronics and automotive parts, is growing at a torrid pace. It posted last year sales revenue of 1,796.7 billion won and operating profit of 67.0 billion won, doubling its size from 2010. Analysts predicted it would double again in sales revenue and operating profit by 2015.

 

On May 15 when it announced its first-quarter operating profit of 26.0 billion won, the LS Group company took the No. 2 position overtaking LS Cable & System, the parent company of LS Mtron as late as 2007. The biggest factor for the company's growth has been tractors. LS Mtron president J.S. Shim had long worked in the tractor division before becoming president. The company's tractor sales are expected to grow more than seven-folds to 704.5 billion won this year from only 100 billion won in 2008.

 

The world's tractor market is about 60 trillion won. This is even bigger than that for the LED light bulb market of 40 trillion won that major companies like Samsung and LG are investing aggressively. The market's growth potential is also strong, given the rising middle class population in China and their fast-growing appetite for meat that must be fed by grains. For example, the annual sales revenue of John Deere of the United States, the market leader, is estimated at 30 trillion won.

 

Since 2009 when Japan's Kubota, the world's then-No. 2 tractor supplier, saw its global sales shrink due to a strong yen, LS Mtron began expanding overseas aggressively. It established a logistics center in the United States, followed by the building of a local plant in China's Qingdao. It then set up a local assembly plant in Brazil last year. Early this year, the company signed an OEM agreement with CNH Global, the world's No. 2 producer of tractors and other agricultural equipment, worth $500 million.

 

Lee Kwang-won, vice president in charge of LS Mtron's machine business, said, "We aim to achieve the 1-trillion-won level in tractor sales and the global top-five supplier position by 2016." Kiwoom Securities analyst Kim Ji-san said, "Up until now LS Cable & System was the centerpiece of LS Group. But that position will be replaced by LS Mtron that will be the most valuable company within the group."