Major Changes in US Data Cable: The new company Belden CDT Inc., based in St. Louis, is to be formed through the announced »merger of equals« between the two US-based telecom/data cable companies Belden Inc. and Cable Design Technologies (CDT), subject to shareholder approval. The transaction is expected to be complete in the second quarter of this year, giving former shareholders of CDT around 45% of Belden CDT and former shareholders of Belden 55%. The merger is expected to create the world’s leading supplier of electronic and speciality wire products, with combined annual sales of US$ 1.3 billion. Savings of US$ 25 million are expected to result from the combination of operations, exclusive of any further savings that may result from the closure of plants or distribution centres. The announced formation of Belden CDT follows the acquisition of Avaya’s data cable business by CommScope. (Avaya had been the number one supplier of LANs cable in the United States.) The CommScope/ Avaya deal was largely finalised early in February, the purchase price for Avaya’s Connectivity Solutions unit being set at US$ 250 million subject to post-closing adjustments, together with 1.8 million CommScope shares and US$ 65 million in assumed liabilities.
Belden Sells Outside Plant Copper Telecom Cable Business to Superior Essex: Following the merger with CDT, in March Belden Inc. entered into an agreement with Superior Essex Inc. to sell its North American copper telecom cable business for a price expected not to exceed US$95 million.
Alcatel and Draka Combine Fibre Optic Businesses: On February 10th, the two European cablemakers, Alcatel and Draka, announced plans to combine their optical fibre and fibre optic cable businesses in a jointly owned company. The Draka interest is set at 50.1%. The new company, with interests in Europe, China and North America, is expected to make € 670 million in revenues in 2004. Draka intends to issue 150 million of new equity in parallel with the creation of the new company.
Wilms Cable Interests Grow: Sweden’s ABB has sold its German power cable subsidiary Energiekabel to the Wilms Group of German wire and cable makers. According to ABB, the move will prevent the closure of Energiekabel; Wilms is committed to taking on 200 of the company’s 350 staff. In 2003, Energiekabel made a loss of € 5.9 million on €60 million sales.
Developments in Croatia: Elka d.d., owner of the newly-formed Croatian cablemaker Elka Kabeli d.o.o, is to increase the capital of its wire and cable subsidiary to US$ 62 million in preparation for its sale by international tender. The transfer of cable assets to the now debt-free Elka Kabeli and subsequent capital increase are thought to be in response to interest having been shown in the parent company by fellow Croatian cablemaker Eurocable.
Wire Harness Investment in Central Europe: French wire harness maker Cemme Thome plans to set up a 2.5–3.0 million factory in eastern Slovakia, creating 280-400 jobs. The company already has a Slovak subsidiary, Cemme Thome SK.
Consolidation in Russia: Plans to purchase two unspecified cable companies for US$ 5 million have been announced by the parent of Sevkabel, Sevkabel Holdings.
Plant Closure in Israel: The Israeli subsidiary of the US-based Superior group, Superior Cables, has announced the closure of its Maalot data cable factory. Production equipment is to be transferred to other company facilities.
African Plant News: Zimbabwe’s Central African Cables Limited (CAFCA) is to spend US $1.2 million on upgrading its MV power cable plant in order to boost domestic output and to strengthen its position in the regional market. The company will co-operate with is major shareholder, South Africa’s African Cables, in promoting exports. In Angola, the »Ex-Diogo D’Avila« cable plant is set to start operating in March, well behind schedule. The plant is being rehabilitated by Portuguese Quintas & Quintas, which acquired the unit for an estimated US$ 2.1 million. The new company, to be called Quintas & Quintas-Angola, will initially produce 6,000 tpy of wire, to be sold locally and in neighbouring countries.
Reopening in Argentina: Italian cable maker Pirelli SpA, is to reopen its La Rosa telecom cable facility in Argentina. Initial production will be of copper cable, with fibre optic cable production expected to follow.
FibreCore Inc. Files for Chapter 11: The US holding company FibreCore Inc., with interests in optical fibre and preform, has filed for protection under the Chapter 11 Bankruptcy Code as it is unable to raise working capital. The move follows an arbitration award of US$ 5.3 million in favour of Japanese company Shin-Etsu Chemical Co. in July 2003. Fibre Core’s operating fibre subsidiaries in Brazil and Germany are not included in the filing.
Phelps Dodge Consolidates in Winding Wire: The US winding wire business of Phelps Dodge Corp. is to be rationalized with the closure of its El Paso, Texas plant and investment of US$ 1.5 million or more in Fort Wayne, Indiana. The El Paso closure will mean 125 job losses. The decision to invest in the much larger Fort Wayne facility, which had also been considered to be under threat, was helped by the offer of US$ 0.9 million in tax abatements and other incentives by local government. About 10% of El Paso’s output is to be transferred to Fort Wayne with most being shifted to non-US facilities, primarily Monterrey in Mexico.
General Cable Announces Plant Rationalisation: A staff cut of about one hundred at General Cable’s Marion, Indiana industrial cable plant to 65 workers has been announced. The remaining workforce will concentrate on mining and other speciality cables. Most of the product lines presently made at Marion will be moved to other company facilities. A charge of US$16 million will be set against the General Cable accounts. The company blamed the move on the »prolonged and unprecedented decline in the North American industrial cable market«.
Furukawa Electric Realigns Foreign Holdings: A 42.5% interest in the Chinese power cable joint venture Shenyang Furukawa Electric has been purchased by Furukawa Electric for HK$100 million. In the United States, the company has announced the integration of its holding companies Furukawa Electric North America and Fitel USA Corp. to form Furukawa Electric North America Inc. The move is intended to improve administration and support systems in North America, which had become over-complicated since the acquisition of OFS (Optical Fibre Systems).
Japanese Cablemakers Consolidate Further: A study is soon due for completion relating to the integration of the power cable operations of Furukawa Electric and Fujikura in Japan. The companies have already transferred underground cable engineering and R&D to a joint venture, Viscas Corp., which may be the focus of
any future cooperation. Separately, Furukawa Electric has announced with Yazaki Corp. a cooperative agreement in commodity grade electric wire businesses, covering construction wire and electronics materials, with combined sales of ¥ 60 billion.
Cooperation in production and logistics and the expansion of existing OEM relationships are envisaged by the companies.
Expansion of Japanese Autoharness Operation in Vietnam: The Furukawa Electric automotive harness subsidiary, Furukawa Automotive Parts (Vietnam) Inc., plans to increase its export sales from US$ 85 million in 2003 to US$ 100 million in 2004. As the company is capacity-constrained, this is expected to mean the building of a second plant with 2,000 employees, to complement the 4,200 employees at its existing unit. Meanwhile, Sumitomo Wiring Systems Ltd. is to form an 80/20 joint venture with local interests to make automotive wire harnesses. The new company, located near Hanoi, will initially invest ¥1.1 billion (US$ 10.2 million) and targets sales of ¥ 5.3 billion (US$ 49 million) by 2006.
Winding Wire Investment in China: The Taiwanese cablemaker Ta Ya Electric is to spend US$ 32 million on a winding wire and assemblies plant in Kunshan as its current facilities are running to capacity. During the first phase, the 7,000 sq.m. plant is expected to produce 6,000 tpy, with commercial start up planned for October 2004. The Malaysian subsidiary of the German Elektrisola winding wire company, Elektrisola (M) Sdn Bhd., has announced the intended completion of a plant near Shanghai, China, in 2005, The company will aim production from its new plant at international markets outside Asia, while the 30,000 tpy it makes at Kampung Janda Baik, Malaysia will continue to be produced for Asian markets. Capacity at the recent joint venture between Chinese winding wire producer Tongling Jingda and Rea Magnet Wire of the United States, Guangdong Jingda Rea Special Magnet Wire Co. Ltd., is to increase from 4,000 tpy to 10,000 tpy due to a combined US$ 2.8 million investment by the two parent companies.
Major Initiative by LG in China: Korean LG Cable and LG Industrial Systems have signed a memorandum of understanding to develop a huge 330,000 sq.m. industrial site in Wuxi, Jiangsu province, by 2006. The intended investment includes that in LG Cable Wuxi Ltd, a wholly-owned automotive wire subsidiary of LG Cable. This project is already underway, with operations due to start in April 2004. LG Cable is investing US$ 8 million on the set up of LG Cable Wuxi on its 66,000 sq.m. site. It targets sales of US$ 160 million in 2008 for the subsidiary. Plans for further investment by LG Cable in Wuxi include projects in copper wirerod, power cable, fibre optic cable, electronic tube and busduct. LG Industrial Systems is to invest US $13 million in an automated equipment production and sales affiliate.
Samsung Invests in Fibre Optic Cable in China: The Korean electronics giant Samsung is to invest US$ 56.8 million in an optical fibre and fibre optic cable plant in Jaikou bonded Zone, Hainan province in China.
Consolidation in China: The Jiangsu Yongding Group is to acquire
the Hubei Hongqi Cable Group. Yongding Cable is primarily a telecom cable company, while Hubei Hongqi is an energy cable making utility, industrial and installation products.
