Cable Connections

Investigating the state of the region's cable market

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2012 is likely to be a good year for the cable industry due to a number of GCC governments stepping up construction investment.
2012 is likely to be a good year for the cable industry due to a number of GCC governments stepping up construction investment.

MEP Middle East investigates the state of the region’s cable industry and finds that it could be on the verge of a business boom. Gavin Davids investigates

One of the great truisms in the building industry, especially in the Middle East, is that ‘out of sight, is out of mind’. While attention is often focused on the glamour side of construction, the likes of plumbing, wiring and cabling are often swept under the carpet and forgotten about.

It’s hard to really fault that attitude; after all, the only time these infrastructure works are remembered is when they go wrong. Yet, that doesn’t preclude their importance to the successful and sustainable running of a building.

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Cabling is vital to this, and over the last few years there has been tremendous work being done to improve the efficiency and performance of cables.

Furthermore, given the increased attention that the green movement has received as the world strives to become more environmentally friendly, manufacturers have strived to make their products more sustainable in the long term, using equipment and materials that lessen the impact on the environment.

Ahmed Fathy El Sewedy, vice president of Doha Cables, a subsidiary of ELSEWEDY Cables, says that this is an attitude that has become increasing prevalent amongst manufacturers in a region that is striving to fall in step with the world’s green regulations.

“We’re committed to producing products in an environmentally sound and responsible manner. We are constantly searching for opportunities to contribute to the environment.

We (Doha Cables) support many local institutions that focus on the importance of the environment, such as Gulf Organisation for Research and Development (GORD) and Qatar Sustainability Assessment System (QSAS),” El Sewedy says.

This is likely to come in good stead for manufacturers who aim to fall in line with regulations that are becoming more and more stringent.

While most regulations currently govern material content or chemicals that go into the manufacturing of cables, companies that use them also have a responsibility to ensure that they meet the required standards.

Phil Burns, managing director of Aggreko Middle East, agrees and says that internationally recognised industry standards should be adhered to when choosing a manufacturing partner for their cables.

“While we’re not in the business of manufacturing cables, we do have a policy of only using harmonised cable providers, which is the internationally recognised industry standards,” he explains further.

“All of our equipment, including its cables, are standardised to ensure that any item of equipment can travel to any part of the world.

“Being a global service provider, our ability to install our equipment in any part of the world is key,” Burns says, but asserts that while all this adoption of green technology is all well and good, the need for a viable market remains paramount, and this is where the GCC has the edge, given the vast scale of construction and infrastructure development that is set to take place over the next decade.

Qatar, with its preparations for the 2022 FIFA World Cup, and possibly, the 2020 Olympics, remains the golden prize for contractors, and consequently, cable manufacturers.

Even without it however, the scope of growth is likely to be huge, with Saudi Arabia and Abu Dhabi investing heavily in infrastructure development and construction.

“Within the next ten years, there will be vast numbers of upcoming projects, especially in oil and gas. The Gulf region specifically is witnessing large investments in this sector, which is why we’re working towards increasing our supply of cables to this growing industry,” El Sewedy says.

Burns adds that 2012 is looking good for the construction industry as well. A number of GCC governments have announced their short and long term construction plans, and these include a significant focus on the continued development of infrastructure, he says.

“These include Saudi Arabia’s $400bn five year public investment programme, from 2010 to 2014, Kuwait’s $107bn development plan and Oman’s $78bn development plan up to 2015,” he says.

“(However), while the KSA, UAE and Qatar are leading in terms of regional investment in construction projects, the GCC as a whole offers interesting and important opportunities.”

El Sewedy adds that as a result of the anticipated demand, he expects Doha Cables to expand its manufacturing process of 400kV and 500kV cables. A rise in the field of super conductors is also anticipated, he says.

“One of the main reasons we see these trends (of increase) is because of Qatar’s goal to expand the local tourism industry, so as to be able to accommodate both the Olympics and the World Cup. While our current largest area of operation is in the GCC, followed by North Africa and Egypt, we also expect to expand into Russia and India. These countries have growing economies which we’re excited to be a part of,” he says.

Highlighting the truth in their opinions, a spate of deals have been announced recently, with the likes of Abu Dhabi Transmission and Dispatch Company inking a deal worth $250m with Prysmian Cables and Systems for a cable installation project in the UAE capital.

Assisting Prysmian Cables with the project will be the Abu Dhabi based joint venture Brouge, who will provide the manufacturer with insulation, semi-conductive and jacketing materials that will address the project’s critical demands of deliverying reliable, consistent and long term performance.

“Cable durability is especially important for those customers serving the high-voltage cable market, where the need for cables that deliver consistent, high-performance under extreme electrical stress is crucial,” says Roland Janssen, vice president, Marketing Centre for Wires and Cables, Borouge.

He adds that the joint venture between Abu Dhabi’s National Oil Company and Austria’s Borealis is scheduled to provide more than 350,000 tonnes of Low Density Polyethylene annually from its yet-to-be completed plant in Ruwais, in Abu Dhabi.

Built as part of the company’s expansion plans, the plant is expected to be completed by 2013 and will help the JV cope with an anticipated rise in demand over the next few years.

With many of these mega deals on the horizon, Phil Burns says that perhaps it’s time for companies that use cables to begin adopting standardisation of their own initiative, as part of an effort to reduce waste and increase deployment speed.

The managing director of Aggreko Middle East suggests that by doing so companies will be able to increase their efficiency when it comes to working on projects.

“With a set of cable sizes, all standardised and colour coded, we have successfully and significantly reduced waste and increased our speed of deployment,” he says, citing his company as an example.

“Companies generally travel with heavy reels of cable and cut them to length on site. Consequently, installations end up becoming more complex and time consuming and often result in wasted cable,” he adds.

“This also results in a set of varying cable lengths. Our approach is to send out a series of standardised, pre-cut cables to projects, thereby reducing transport costs and most importantly, installation time.”

With the shadow of the Qatar World Cup hanging over the entire region, both El Sewedy and Burns say that they expect significant growth for the cable industry over the next year, with competition likely to increase as rivals try to muscle in on the action.

As a result, El Sewedy says that local companies need to step up their ideas and explore other avenues of business to stay ahead of the competition, much like how Doha Cables is endeavouring to do.

“We are staying ahead by being a solutions provider as well as covering all ranges and types of cables. As a company, we’re constantly looking for new ways to both improve our work and maintain our excellent reputation to all our clients and employees,” he says.

“While the political instability in the Middle East has affected most businesses in the
region, globally there has been a general decline in demand as well as an oversupply. Our solution is to be not only a cable provider, but also a solutions provider; this will allow us to be competitive in both service and supply.”

However, Burns says he’s much more positive, citing the oil rich economies of Saudi Arabia and Qatar as examples of how the GCC can use its wealth to diversify and build their industries and service sectors.

“It’s certainly a much more healthy market than back in 2009.”

“The construction world’s eyes have been on Qatar since the announcement of the FIFA World Cup 2022 win. The country is set to grow its share of GCC infrastructure projects by allocating 37% of its budgets to major projects,” he says, bretraying more than a hint of optimism and excitement hiding behind his reserved demeanour. 

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