International cable and wire companies planning expansion in Vietnam

Electricity demand in Vietnam is on the rise. Market watchers say the demand will increase at more than 10 per cent per annum rate in the near future. The rapidly increasing population and economic growth is being viewed as the major driver for growth. Southern Vietnam is passing through a critical situation due to the current demand-supply imbalance. According to the industry experts, there is an urgent need for the development of power generation and transmission infrastructure in the region. To leverage on the opportunities, international companies having expertise in aluminium cable and wire manufacturing and related product segments are thronging the region in huge numbers.

Hydroelectric generating capacity in Southeast Asia, 2012, and planned additions 2012-2020, by country


  Source: http://www.eia.gov

Late last week, South Korean cable manufacturer LS Cable & System announced the initial public offering (IPO) of its subsidiary LS C&S Asia on the country’s main bourse, Korean Composite Stock Price Index (Kospi) next month. According to a release posted on the company’s website, as the Vietnamese government is now carrying out many power projects due to its high economic growth, the sales of extra high voltage cables are expected to increase sharply. ASEAN countries are also expected to expand their investments in their power and communication infrastructure as their economies are growing by more than 5 per cent a year on average. It is this gleaming prospect of growth they are looking at to cash on in the near to long term.

The company is aiming for 1 trillion won ($890 million) sales revenues in 2021, compared with the 490 billion won ($436.5 million) last year, said CEO MyungRoh-hyun. LS C&S Asia is also planning an additional investment of $15 million in Vietnam to be disbursed from now to 2020, and to export products to other fast growing economies in the region, including Myanmar, Laos, and Cambodia.

                             Viet Nam: Energy Sector Assessment, Strategy, and Road Map

  Source: Asian Development Bank

Taihan Cable Vina (TCV) is another wire and cable manufacturer that is expanding their business rapidly in Vietnam. The company is planning to build a plant in Vietnam for high-margin products, such as ultra-high voltage cables and aluminium conductor composite core cables, to strengthen the competitiveness of TCV. Based on the region's soaring demand prospects, the company expects its annual sales revenue to rise from $36 million in 2015 to $190 million by 2020.

Germany-based cable producer Helukabel GmbH, has also been reported to be ramping up their sales activity in the region. The company recently opened its 26th global subsidiary in Ho Chi Minh City. “We expect solid, double-digit growth in Asia overall,” a Helukabel spokesman said.

According to a forecast by the International Energy Agency, the demand for electricity for Southeast Asia is expected to triple from now to 2040.

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