Stable cable? Insight into the cable sector

Utilities Middle East presents the views of the cabling industry

Eric Sohne president and CEO of Global Supply Chain Solutions.
Eric Sohne president and CEO of Global Supply Chain Solutions.
Robert Tarimo, marketing manager, Dow Wire  and Cable.
Robert Tarimo, marketing manager, Dow Wire and Cable.
Andrew Shaw, managing  director, Ducab.
Andrew Shaw, managing director, Ducab.

Utilities Middle East presents the views of the cabling industry from three different company perspectives.

There are many issues concerning the cabling industry currently, but three in particular stand out from the rest. Cabling is a product which is used in the kind of situation where it simply can’t afford to fail. With this in mind, standards of cables must be high, and a cable must either last for a long time or alternatively be maintained regularly.

Another issue which is affecting the sector is the new technology which is breaking through. Companies are investing billions of dollars into how to make cables as efficient as possible. A large amount of power can be lost in transmission and a lot of this is due to cables. A number of new products are now hitting the sector, although one has yet to really take a grasp.

A third issue comes from the economic situation and how the global crisis has taken its toll on the industry. Like any other, it has been affected by project delays and funding issues.

But power is a supposedly recession proof sector and as it’s always needed, can only slow down a certain extent.

Utilities Middle East talks to three companies on the three main issues affecting the cabling sector. The firms range from one trying to break into the sector, to one supplying materials for high standard cabling, right through to an established company and its performance through the tough year which was 2009.

Breaking through
Eric Sohne, president and CEO of Global Supply Chain Solutions is attempting to get his cabling product established in the Middle East regional market.

Could you explain your product?
The CTC cable provides lower maintenance, better conductivity of the electricity that is going down it; it provides less heating so you get less line losses. You pay for what you get.

The installation costs are lower because you don’t need as many towers because it is lighter. In the end it will last much longer and provide you with much better capabilities in terms of maintenance costs. It’s been around a while, it has been around for nearly 15 years and it is a small firm so I’m on board to push things forward globally.

The cabling that is here has been for a long time, so it’s coming up to the time when it needs to be replaced, so replacement costs will be lower with this product.

What advantages does it bring?
It is lower on maintenance because of the technology of the design itself. The thing is that it is much lighter so the stresses on the cable are much lower.

How have you gone about breaking into the Middle East market?
I have a partner in the form of Al Mostajed Technologies and we are in this together. In any local area you need to have a partner who knows the lay of the land. There has been interest locally in the product.

What are the challenges you are facing?
In the US if you did $100m in sales last year or two years ago, now you are doing 15% less if you are lucky and it is difficult times. We believe we are starting to see a turnaround though.

I would say it is true, particularly in this product in cabling, its an older market in the Middle East in general so it is time for upgrades we think.

Another question the industry is facing is why would you want to add power capability if you can’t transfer it across to other areas? If the line losses are high there is little point. So what you want to do is not only improve the power with technology but also the technology of the infrastructure and transmission at the same time.

Market experience
Ducab recently announced it had achieved global sales of AED2.4 billion during 2009. In the same year the firm also went through a number of expansions.

Andrew Shaw, managing director of the firm explains the how the year went. “This last year was a very challenging period worldwide, although infrastructure projects can be counter-cyclical in a downturn as governments spend money in order to stimulate economic activity.”

“The Middle East as a whole remained a strong market for Ducab in 2009, and today we believe that customer service is without a doubt the most important aspect of our business. By investing in our products and our partners alike, Ducab will continue to offer reliable cables solutions to its clients whilst contributing to the growth of the national economy here in the UAE.”

Quality control
Robert Tarimo, marketing manager, global HV solutions, Dow Wire and Cable, reveals the issues surrounding the quality of cable.

How does Dow interact with the cabling industry?
Our business predominantly manufacturers cross polyethelyene compounds that are used to manufacture underground cables for low, medium and high voltage cables. We sell those compounds to cable manufacturers.

As this region and other regions across the globe invest increasingly in electrical transmission and distribution systems, we believe that the selection specification standard of raw materials or plastic compounds is an important element to ensure the reliability of these systems.

How important is quality in cables?
If you are spending billions of dollars or dhirrams to install these systems, you want to be sure that they will last a long time. So we have introduced a new way to allow utilities to identify quality cables that are made from quality materials.

What are the challenges you face?
In all geographies what we are seeing is two critical requirements. One is the requirement to build new transmission and distribution infrastructure and the other is to renew that infrastructure. The renewal is taking place in more developed economies and the new build is taking place in developing economies.

The challenge of course is making sure that one is selecting the right cable of the right quality, so cables can last a long time. So we see that as a critical challenge.

We also have seen some sort of a drop in activity due to the economic downturn which is affecting all regions equally.

But in terms of the long term trends in this industry we think there will be steady growth over time because of the requirements in terms of building and renewing infrastructure. We see this sector as a healthy industry for the foreseeable future.

What specifications should you look for in a cable?
On the high voltage side the key requirement in terms of materials is cleanliness. Those cables tend to operate at very high stress levels and the presence of contaminants can cause premature cable failures, so cleanliness of the materials is a key component of them.

How do you believe technology in thie cabling sector will improve in the next 12 months?
We have continuous improvement programmes, in terms of obtaining greater cleanliness levels. But what we are really looking at as a corporation, and what we see as an opportunity for development in the future within the cable market, are solutions that are going to facilitate the easier installation of powercables for utilities.

Look at the total cost of power transmission and distribution system, cable is a relatively small part of it but you have massive installation costs and you also have losses in transmitting that power.

On an average network you are losing 9% of power through the process of actually transmitting it. So this we see as a big opportunity to develop technologies that allow for the easy installation of cables and to reduce the installation costs and in the future to manage to reduce the losses on the cables.

In the next 12 months my hopes would be for a fairly rapid recovery. And then of course a lot more regulation for the quality of cables and the quality of materials, because this is a very important decision to make with the the consequences high if this is not done right.


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