OUTSIDE COMPANIES EXTEND INTERESTS

Growing Activity

In the past, manufacturing activity by the major global cable groups, with the notable exception of Nexans, in most countries of MENA has been limited. Until recently, Turkey was the only country within MENA that had attracted the attention of several of the global cable groups (Prysmian, Nexans and Corning). Traditionally, these global groups have serviced other markets within MENA by exports from locations in Europe or Asia, usually by addressing larger projects. In view of the strong and continuing market growth in the region, cable-makers based outside the region have been focusing greater attention on manufacturing opportunities within MENA. Furthermore, some countries, such as Algeria, have encouraged greater outside investment in the cable industry as a route to privatisation of state-owned manufacturing companies.

 

Nexans Extends Interests into GCC

Of the major global cable-making groups it is Nexans that has the greatest presence in the MENA region. Nexans is already well established in MENA through Liban Cables in Lebanon, International Cable Co. in Egypt and Nexans Maroc. Nexans announced in June 2008 that it is extending its presence into the GCC region by creating a joint venture company (Qatar International Cable Co.) to manufacture LV and MV energy cables, to be in production by the end of 2009. In the GCC Draka also has a presence through its minority stake in Oman Cables Industry.

 

Others Also Make Investments

Other global cable companies have also established presence in MENA, though the number of instances is limited. In 2008 General Cable entered into a joint venture in the state-owned Algerian energy cable producer Enica Biskra, acquiring a majority stake in the business. Fujikura is establishing an operation to produce power cables in Jordan in joint venture with Middle East Specialised Cable (MESC). The new company, MESC-Fujikura Cable Co., should be in production by early 2009. Fujikura has also recently acquired a 20% stake in Middle East Fibre Manufacturing Co. (MEFC), which produces optical fibre and fibre optic cable in Saudi Arabia.

 

MENA Groups Look Outside

One of the groups based in MENA has cable manufacturing operations outside the region, though this is an isolated example, and does not suggest a more general trend to make investments outside the region. This is hardly surprising considering that there are much clearer opportunities within MENA. Coficab, the Tunisian cable producer, whose main business is in auto cable, has production operations in Tunisia and Morocco, but also in Portugal and Romania. The Egyptian El Sewedy group, in addition to its extensive interests in cable manufacturing in other MENA countries, has suggested that it will look to invest in other parts of Africa, but this may not necessarily be in cable manufacturing.