LS intensifies rivalry with Daedong, TYM in Ukraine’s farming equipment market

LS Corp. Vice Chairman and CEO Myung Roe-hyun, second from left, talks with Ukraine's Agrarian Policy and Food Minister Vitaliy Koval, second from right, during their meeting in Kyiv this month. Courtesy of Ministry of Agrarian Policy and Food of Ukraine

LS Corp. Vice Chairman and CEO Myung Roe-hyun recently visited Ukraine to discuss with the country's Agrarian Policy and Food Minister, Vitaliy Koval, the possibility of constructing a modernized tractor plant once hostilities cease.

His visit signals intensifying competition among Korea's three largest agricultural equipment makers — LS Mtron, Daedong and TYM — to secure a dominant position in the country known as the breadbasket of Europe amid ongoing peace talks to end its three-year war with Russia.

According to the Ukrainian agrarian policy ministry, the new factory is expected to be built under a joint venture agreement between a local company and LS Mtron, the machinery unit of LS Group.

Ensuring the Ukrainian government's support for the potential joint venture, Koval emphasized that the construction of the tractor plant would be a strategic step in developing the country's agricultural sector.

"Since the beginning of the full-scale invasion of Russia into Ukraine, we have lost more than 8,000 units of machinery and equipment, of which over 1,000 units are tractors," he said. "We are interested in the years of experience and advanced technologies of LS Group in the production of agricultural machinery, which they are ready to integrate into production in Ukraine."

He added that the factory's construction will be just the beginning of their collaboration.

Considering that LS Group Chairman Koo Ja-eun also selected Ukraine as a key market for the group’s expansion, the Korean conglomerate is expected to seek a variety of other business opportunities in the European country.

LS Mtron entered the Ukrainian market in 2017, supplying $100 million worth of tractors in collaboration with POSCO International, a Korean trading firm. In 2019, the farming machine manufacturer began assembling tractors at a Ukrainian factory.

Given Ukraine's goal of producing its own agricultural machinery by 2030, LS Mtron may outpace Daedong and TYM, which have focused more on exporting their products from Korea.

Daedong began shipping tractors to the Ukrainian market in January after signing an agreement with a Ukrainian importer last November to supply 30 billion won ($20 million) worth of tractors over the next three years.

TYM has increased its donations of machinery to Ukraine, as the company has yet to sign a sales agreement with a Ukrainian partner.