South Korea’s conglomerate LS Group is expanding its automotive electrics business in order to diversify its business portfolio. According to sources from the business circles on Tuesday, the group decided to list its auto components arm Daesung Electric Co. and double the company’s overseas production bases to six.

Daesung Electric has been developing and producing auto switches and electronic control units (ECU) since its foundation in 1973. It ranks as the country’s top switch and ECU supplier. Its switch supplies takes up 4.3 percent and the ECU 12 percent of the global market. It was acquired by LS group in 2008 and now is wholly-owned by LS Mtron, the group’s machinery arm.

The company is operating three overseas manufacturing plants in Qingdao and Wuxi in China and Tamil Nadu in India. After going public, it will add one more each in China and India and set up a new facility in Mexico to venture into the North American market as part of efforts to broaden its global presence.

“The total value of orders exceeded 1.6 trillion won ($1.45 billion) last year, and we recorded all-time high profits and sales in the first half of this year,” said an unnamed official from the company. “We will keep the profit-making momentum by expanding our operation in promising markets,” he added.

The company supplies its auto parts not only to domestic finished car makers such as Hyundai Motor, Kia Motors, and Ssangyong Motor but also to global automakers including Volkswagen, General Motors, Nissan Motor and Fiat Chrysler.

According to U.S. market research firm Strategy Analytics, the global auto electronics market would grow fast from $239 billion of last year to $303.3 billion by 2020. In line with the rapid growth in the global market, Daesung Electric’s operating profit continued to increase from 27.7 billion won in 2013, 30.7 billion won in 2014 and 36.3 billion won in 2015. Its sales also surged from 663.5 billion won in 2013, 715.5 billion won in 2014 and 808 billion won in 2015.

The company’s strength also lies in its focus on research and development (R&D). It increased its R&D budget from 24.9 billion won in 2013 to 31.2 billion won in 2015.

The company’s official said that it is continuously expanding its investments in R&D to have a competitive edge in the auto parts industry. It spends around 5 percent of its revenue in R&D, and out of about 1,000 employees, 300 are working for R&D, he added.

By Yoon Jin-ho

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