Wire and Cable Industry Returns to Profits

LONDON, July 18 /PRNewswire/ — The wire and cable industry has seen a significant recovery in the last 18 months. A study of the world’s leading 60 wire and cable producers published by Integer Research has revealed they have combined wire and cable revenues of US$47.4 billion in 2004, and more than US$56.4 billion in 2005.

“The industry also reported total revenues of US$82 billion in 2004 and US$97 billion in 2005. In part the continued expansion in the Chinese cable market has driven growth globally, combined with a recovery in demand from the US cable sector, from the low point in 2002,” says Integer Research Director, Philip Radbourne.

“The 60% increase in copper prices during 2006, which is a five-fold increase from the low of US$1,400 per tonne in November 2001, has also meant that the wire and cable industry will likely surpass the US$120 billion level. This is if prices continue at their present level through H2 2006.”

Integer Research analyst, Craig French continues, “As a result, the world’s leading 60 wire and cable producers returned to profitability in 2004 and 2005. Most companies showed both operating and net profits in their 2004 annual financials. This trend continued into 2005, despite higher raw material prices. Higher global demand for a range of cable products, with significantly higher demand from the US and Chinese cable market, helped improve operating margins.”

“Net profit margins across the industry reached 1.1% in 2004, which although modest, were still better than the previous three years of net losses. However, this is still lower than the industry average of 4.5% in 2000,” says French.

The global wire and cable industry is still dominated by Western or North East Asian cable makers. The leading global players either have a domestic headquarters in the USA, Western Europe or North East Asia.

“Three cable producers Nexans, Prysmian, and Sumitomo Electric dominated the global industry in 2004 and 2005, with each company reporting wire and cable revenues of more than US$4 billion in 2005. The other leading cable producers in the Top 10 include Furukawa Electric, Draka, General Cable, Southwire, Fujikura, LS Cable and Walsin Lihwa,” says Radbourne.

“The leading Top 60 producers have continued to invest in China, where 30 of these companies have at least one cable manufacturing operation. Most of the leading 20 companies had set up manufacturing plants in China, with the exception of the leading US producers, Southwire, General Cable and Belden CDT. Superior Essex and CommScope have set up new plants in the last 18 months. As yet, no major Chinese producers have emerged to threaten the dominance of these global players, but we would expect one or two leading producers from China to emerge with the next five years.”

For more information regarding the Wire and Cable Financial Insight Service, please contact Ines Birnmeier in London on +44-(0)20-7503-1265.

Integer Research

Integer Research is the leading supplier of market analysis, forecasts and strategy consultancy to the wire and cable industry. Integer uses its team of engineers, economists and analysts to offer tailored consultancy services, regular reports and financial profile services.

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Integer Research Ltd

CONTACT: For more information regarding the Wire and Cable FinancialInsight Service, please contact Ines Birnmeier in London on+44-(0)20-7503-1265.