The Dh6.3 billion worth utility cable industry in Gulf Corporation Council (GCC) is in the midst of a historic transformation. A paradigm shift in conventional business drivers is stirring up new trends as vertically integrated utility cable manufacturers size-up a fitting approach to swim with the tide.
Industry players looking to create their mark in the future cable marketplace are invariably shaping up more diverse corporate structures and product offerings. While some will continue to operate in narrow niches, the future of the region’s utility cable industry will require total devotion on quality and competence at a grand scale.
“The market landscape is evolving at a pace never witnessed before,” says Andrew Shaw, Managing Director at DUCAB, a leading manufacturer for utility cables and cabling products in the Middle East. “Some of the old practices will no longer be tenable in a marketplace now headed for real competition.”
The GCC utility cable market, dominated by UAE and Saudi Arabia, is well-placed on an assured growth trajectory, driven by unprecedented demand for increased power generation to cater for a growing population and a buoyant construction sector.
A recent report by Frost & Sullivan projects the GCC market for power cables to reach nearly $9 billion in revenues, based on assumptions relating to copper and other raw material prices.
The power cable market space, traditionally occupied by cable manufacturers such as UAE’s DUCAB and Saudi Arabia’s Riyadh Cables, Jeddah cables and Saudi Cables is fast being encroached upon by new players, keen on flaring up their share.
The latest market entrants include companies such as Bahra Cables, Al Fanar, RESCAB, QICC, El Sewedy in Saudi Arabia and Qatar, and Power Plus who are capitalising on their close business links with end users.
In 2017, DUCAB will for the first time start manufacturing high voltage and extra high voltage overhead cables to help reduce overdependence on imported products.
Last year, with an investment of Dh220 million for buildings, machinery and infrastructure, DUCAB set up an aluminium manufacturing plant at Khalifa Industrial Zone Abu Dhabi (Kizad) under a joint-venture with SENAAT. The joint venture, DUCAB Aluminium Company (DAC), will develop a 50,000tpa aluminium rod mill, of which 16,000tpa will be converted on-site into finished overhead conductors.
Production of aluminium rod is expected to commence mid next year to address the shifting trend towards a preference for aluminium conductor over copper, mainly driven by Saudi Arabia, DUCAB’s main market for cables.
“Although aluminium occupies a larger space, it is very cheap compared to copper. We are seeing more demand for aluminium conductors in Saudi Arabia and we believe that this is going to be replicated in UAE and other countries in the GCC where copper is still dominant,” says Shaw.
DUCAB also hopes to take part in the GCC interconnection power grid once it starts rolling out its overhead cables onto the market.
