Southeast Asian Transmission and Distribution (T&D) Cables Market

Sound Economic Growth Delivers Positive Momentum for the Southeast Asian T&D Cables Market

During the last ten years, the T&D cables market in Southeast Asia has seen rapid development, responding to strong economic growth. The increase in power demand, building and industrial construction development, government interest in raising infrastructural developments, and the power sector reforms that support overall energy infrastructure development are the prominent factors driving growth in domestic markets. Exports to other regions such as the Middle East, Australia, America, Vietnam, and Indonesia also provide a fillip to the growth of the cables market in the short and medium terms. "Indonesia is the largest power cables market in Southeast Asia with its intention to complete the power interconnecting line between major islands and achieve electrification ratio up to 90 percent in the next ten years," notes the analyst of this research service. "The recent boom in the building and industrial construction sector in Vietnam is also opening up new avenues for cable suppliers." The structure of the cables industry is quite stable and the demand for both transmission and distribution cables is expected to continue on an upward trajectory. Both Vietnam and Indonesia had the highest T&D cables market compound annual growth rate (CAGR) during the period from 2005 to 2008. The Philippines offers the greatest potential for submarine electric cables.

Volatile Copper and Aluminum Prices Impact Market Dynamics

The recent fluctuation in the price of copper and aluminum has affected the selling price of cables. Price and lead time are the major competitive factors in the market. Aluminum and copper prices in South East Asian countries had increased by almost 30 to 40 percent during 2007 to 2008 due to limited supply but are expected to decrease during the coming years. The Southeast Asian countries import 60 percent to 70 percent of non-ferrous metal from countries such as China, Korea, and Europe. "The high dependence on imported raw material adds further risks to South East Asian manufacturers from fluctuation in global costs and exchange rates," says the analyst. "End users and investors are reluctant to make significant investments as doubts have emerged over economic performance and the extent of the government's commitment." Participants must work toward enhancing flexibility and adaptability with changes in the business environment and standards and provide comprehensive packages or customized solutions specifically designed for each end-user group. For instance, in response to the dip in aluminum and copper prices by 60 percent and 70 percent respectively, during the third quarter of 2008, manufacturers in the Southeast Asian region slashed cable prices using aluminum and copper conductors by 60 percent and 50 percent, respectively. While lead times are variable and depend on the production capacity of each company in the region, of late, robust demand has considerably ratcheted up the lead time required to supply cables. As companies are striving to provide a broader portfolio of products, the industry is experiencing increasing consolidation.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

By End-user Vertical:

• Building construction
• Manufacturing
• Construction
• Power transmission and distribution

Technologies

The following technologies are covered in this research:

• Transmission cables
• Distribution cables
• Submarine cables