Realignment in US Winding Wire:
The US winding wire business of French cable producer Nexans is to be sold to Superior Essex for ? 15 million (US$ 18.5 million). The figure includes ? 6 million (US$ 7.4 million) in receivables from customers. The LaGrange, Kentucky winding wire plant of Nexans will be transferred to Superior Essex and will subsequently be closed. Superior Essex plans to absorb incremental sales within its six existing plants. Nexans will retain ownership of its specialist large-size winding wire facility in Simcoe, Canada.
Rationalisations at Belden CDT:
Following the announcement in August of the intention to close its Essex Junction, Vermont plant in Canada, the newly merged Belden CDT announced further closures on September 12th as part of a previously announced plan to cut costs by US$ 25 million a year. Coming under the hammer this time were the former Montrose cable operation of CDT in Auburn, Mass. and the Barcel subsidiary in Irvine, Calif. In Europe, Belden CDT was in discussions relating to the closure of the Skelmersdale plant in England operating under the Raydex name and employing 220 people. Equipment and output from the facilities listed for closure is mainly to be transferred to other facilities. Additionally, the company announced its intention to stop production of some lower-margin products in the Netherlands. The actions announced in September were expected to result in a US$ 11.5 million charge against third quarter accounts.
Cost Cutting at CommScope:
The US cable and connectivity company CommScope Inc. has announced a cost-cutting plan at its Connectivity Solutions Manufacturing Inc. subsidiary acquired from Avaya in January this year. The unit makes LANs cable and networking products. The cuts, which will hit the company’s Omaha, Nebraska plant, will incur a cash cost of US$ 10-15 million but will save US$ 20-35 million per year.
Developments at General Cable:
The Marion, Indiana industrial power cable plant of General Cable is now to stay open, saving 172 jobs. Another General Cable facility, the automotive products plant in Altoona, Pennsylvania, is to expand, 90 jobs being added to the existing 225 over the next three years.
Invex Gets the Pirelli’s Winding Wire Business in Brazil:
Having taken over the winding wire operations of Pirelli in Italy and China in 2002, in October this year Invex acquired from Pirelli the Brazilian winding wire company Prodtos Patronizados Especiais (PPE).
Pirelli to Exit Cable?:
According to press reports, Pirelli has appointed JP Morgan, Lazard, Lehman Brothers and Mediobanca to advise on the potential sale of both its energy and telecom cables business. Pirelli says that it intends to retain a minority stake. Various parties have expressed an interest in the potential sale, including Investitori Associati, the ultimate owner of Pirelli’s former winding wire business. Pirelli is reported to expect to raise ? 1.5-2.0 billion (US$ 1.9-2.6 billion) from the sale.
Realignment in European Winding Wire:
The United States’ Phelps Dodge Magnet Wire has formed a partnership with German winding wire producer Schwering & Hasse Elektrodraht GmbH. Under the terms of the deal, Phelps Dodge Magnet Wire’s sole production facility in Mureck Austria, will close, with the loss of 59 jobs. The production equipment will be relocated to Schwering & Hasse facilities in Germany, along with the company’s customer and sales network. An expansion at the Schwering & Hasse Lugde facility is currently underway. Phelps Dodge decided on this strategic withdrawal from Europe as a result of falling sales and growing losses in Austria as the plant’s major customers moved their production offshore.
NKT Withdraws from Optical Components:
Having failed to find a buyer for NKT Integration, a maker of optical components, Denmark’s NKT Holdings is to cease operations at this loss-making subsidiary. One-off expenses of DKK20 million (US$ 3.6 million) will be incurred.
Automotive Harness Business in Western Europe:
In October, automotive parts company Valeo was discussing with the local Works Council the closure of the company’s Orense wire harness plant in Spain, which employs 234 people. Production will be transferred within the group. The plant closure issue is a delicate one for Valeo. Some 260 former employees of the Labastide-Saint-Pierre cabling plant in France, which closed at the end of 2003, are taking proceedings against the plant owner Valeo through an industrial tribunal. The employees claim that there was no economic reason for the redundancies, as Valeo was not in financial difficulty, but had relocated their jobs to Tunisia and Turkey. The much larger French cablemaker Nexans has made assurances to employees that certain of its jobs in France will not be relocated to the Czech Republic, as had previously been envisaged.
New Wire Harness Plant in Romania:
The November opening of the third automotive wire harness plant of Sumitomo Electric (SEI) in Romania is indicative of the general shift of this business within Europe.
Small Rod Line for Bulgaria:
A ? 1 million (US$ 1.3 million) contract has been signed by Cablecommerce of Bulgaria to install a 6,000 tpy Rautomead copper wirerod line. Commercial production is expected early in 2005.
Tele-Fonika of Poland Invests:
On the back of a strong financial performance in 2004 based on booming domestic and export sales, Tele-Fonika Kable is planning to invest in a new logistics centre in Ozarow, Poland. It also intends to embark on cable production outside its home base, through a new cable plant in the Ukraine.
Sevkabel of Russia Expands Further:
Having recently commenced production at its new ? 6.6 million (US$ 8.2 million) LV/MV power cable facility, JSC Sevkabel Holding is investing a further ? 6.2 million (US$ 7.6 million) in an NYM building wire line, the first stage of which is due to commence production in December 2004. The company intends, through extending existing facilities and acquiring new ones, to achieve a 30% share of the Russian cable market by 2007. Output is expected to have nearly doubled in 2004 to reach RUR3 billion (US$ 100 million), with a further increase in 2005 taking output value to RUR5 billion (US$ 170 million).
Kazakhstan Invests in Germany:
The German wirerod and rolled products company Mansfelder Kupfer & Messing (MKM) has been acquired by the Kazakh copper producer Kazakhmys from its former owner, Lamitref of Belgium. The deal includes the Hettstedt wirerod line. In 2003, MKM consumed 209,000 tonnes of copper.
Wirerod Projects in China:
Copper producer Tongdu Copper Industry plans to install a 150,000 tpy copper wirerod line at an investment cost of RMB 445 million (US$ 54 million). It also intends to install a 75,000 tpy brass rod facility costing RMB 485 million (US$ 49 million). Capacity at the Changzhou Jinyuan Copper wirerod line in Jiangsu province is to be raised by 50% from 120,000 tpy to 180,000 tpy. A further 10,000 tpy line, with associated insulated cabling facilities is planned by Hua Yi Copper in Kunshan, Jiangsu province. The company expects to invest US$ 10 million in this project.
Developments at Pacific Electric and its Subsidiaries:
Thailand’s Charoong Thai Wire & Cable, is to acquire shares worth Baht 41.8 million (US$ 1 million) in winding wire producer Shanghai Yayang Electric Co. Ltd., raising its stake to 91.7%. Charoong Thai is a wholly owned subsidiary of Asia Pacific Wire & Cable (APWC), itself (until recently) a majority owned subsidiary of Pacific Electric Wire & Cable (PEWC) of Taiwan.
New Cable Plant in Vietnam:
A new cable plant in Danang has been opened by HCM-City based Tan Cuong Thanh, with the capacity to make 40,000 tpy of wire and cable.
Investments by Wonderful Wire:
Malaysia’s Wonderful Wire & Cable Bhd is to buy fellow Malaysian cablemaker Flexomers Sdn Bhd for RM 5 million (US$ 1.3 million), allowing it to make rubber insulated cable. Wonderful Wire also plans to set up a joint venture cable plant in Doha, Qatar with local business interests, at an investment cost of RM 30 million (US$ 7.9 million).
Wire Harness Expansion in the Philippines:
The wire harness company Pilpinas Kyohritsu Inc, is to expand output from 0.9 million wiring sets annually to 2.4 million sets, resulting in nearly 1,500 new jobs at the company’s plant in Insosloban, Lipa. Pilipinas Kyohritsu is 68% owned by Kyohritsu Hiparts Co. Ltd., 29% by Sumitomo Wiring Systems, both of Japan, and 5% by local interests.
Sumitomo Invests in Korean Wire Harness Maker:
A combined 60% stake in Korean auto harness maker Kyungahin Industrial has been acquired by Sumitomo Electric Industries (30%) and Sumitomo Wiring Systems (30%). Kyungashin employs 900 people and in 2003 achieved revenue of Won 235 billion (US$ 196 million).
Investment Plans of LG Cable:
A huge Won 1.5 trillion (US$ 1.3 billion) investment by 2012 is proposed by LG Cable as part of the company’s new eight-year plan. LG Cable intends to strengthen its overseas sales and diversify its business portfolio. Geographical coverage is to be deepened, while product focus in areas such as mobile communications components and rechargeable batteries is to increase, with emphasis being reduced on lower margin wire products.
Investment Plans of Showa Electric:
In its seventh mid-term business plan, which started in FY 2004/05, Showa Electric Wire & Cable announced its intention to focus resources on four growing business units while it restructures operations and products in the core metallic wire and cable and optical businesses. The four areas of product focus will be precision devices (including heat rollers), vibration control systems (including seismic isolators), wire harnesses, and compact termination devices for electricity.
Fujikura Changes its Stance in Telecoms:
A 20% planned reduction in information and communications sector capacity has been announced by Fujikura Ltd. The production equipment is to be discarded and 300 jobs will be either lost or transferred. In a separate move in this sector, Fujikura has announced its intention to form a 50/50 fibre optics joint venture in China with the local telecom equipment company Fiberhome Telecommunications Technologies Co. Ltd. This should create one of the top three optical fibre and fibre optic cable suppliers and, for Fujikura, overcome the anti-dumping issues that surround this market in China.
Furukawa Electric Realigns its Industrial Cable Business:
The industrial power cable business of Furukawa Electric Co. Ltd. in Japan is to be merged with that of its subsidiary, Furukawa Industrial Cable. The company, to be called Furukawa Electric Industrial Electric Wire, will target annual sales of Yen 20 billion (US$ 180 million) in FY 2005/06 and an operating profit of Yen 500 million (US$ 4.5 million) in FY 2006/07.
Furukawa Electric Teams Up With Valeo:
The automotive equipment company Valeo is to form a 50/50 wiring systems joint venture with Furukawa Electric of Japan. The new company, to be called Valeo Furukawa Wiring Systems, will be headquartered in France and will have offices in Japan, China and North America.
New Cable Plant in Japan:
The Mitsui Kinzoku affiliate, robotic cable manufacturer Yoshinogawa Electric Wire & Cable, has signed a lease to set up a new 10,000 sq. m. plant in Kagawa prefecture, southwest Japan.
