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Power Plant Upgrades in South Africa Charge Up Local Manufacturers of High Voltage Cables and Overhead Conductors Finds Frost & Sullivan - The beleaguered South African high voltage cables and conductors market has received a fillip with power utility Eskom launching a massive infrastructure development drive
Power Plant Upgrades in South Africa Charge Up Local Manufacturers of High Voltage Cables and Overhead Conductors Finds Frost & Sullivan

 

PRZOOM - /newswire/ - Cape Town, South Africa, 2010/04/29 - The beleaguered South African high voltage cables and conductors market has received a fillip with power utility Eskom launching a massive infrastructure development drive.

   
 
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The $1.532 billion power plant integration and grid strengthening programmes offer a plethora of opportunities to cable manufacturers, as these plants need to be connected to the main transmission grid infrastructure.

New analysis from Frost & Sullivan (energy.frost.com), The High Voltage Cable and Overhead Conductor Market in South Africa, finds that the market earned revenues of $1.47 billion in 2009 and estimates this to reach $3.59 billion in 2015. The advancements in cable and conductor manufacturing materials are expected to improve efficiencies and reduce production costs significantly over the next decade.

If you are interested more information on this study, please send an email to Patrick Cairns, Corporate Communications, at patrick.cairns[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country.

"Many African countries including Botswana, Zimbabwe, Angola, Mozambique, Namibia, Democratic Republic of Congo, Kenya, Mauritius and Ethiopia are also embarking on developing new power generation infrastructure," says Frost & Sullivan Research Analyst Marc Goldstein. "This all has to be integrated into the existing grid infrastructurse. Local cable manufacturers will be keen to have a share of this pie."

Market participants will also feel buoyed by the average age of equipment in the transmission network. The government will be looking to maintain the integrity of the network by regularly replacing the existing networks, most of which are 31 years old and some, more than 50 years.

Despite such active support from Eskom, local cable and conductor manufacturers are feeling the heat of the competition from low-cost imports manufactured in Brazil, China, India and Zambia and are struggling to maintain their market positions. They also have to deal with decreasing tariffs and free trade agreements (FTAs), and these market dampeners are compelling them to find novel ways to hold on to their market shares. However, their major challenges are the funding uncertainty for key end users and working capital constraints, which place added pressure on production processes and product pricing.

"Uncertainty regarding demand forecasting and illiquidity in working capital can have considerable impact on local manufacturers that hold large quantities of stock in raw materials to meet customer demand," says Goldstein. "Eskom's inability to raise adequate capital to fund their development programmes has led to festering apprehensions about future contracts."

Manufacturers have reacted to the uncertainty by imposing tighter controls over operations by reducing headcount, mothballing production facilities and investing in increasingly advanced production tolls to boost efficiency.

Apart from improving production efficiencies, cable manufacturers also have to focus on providing extensive, value-added and radical business services to key end users to stay afloat in the market.

"They will not be able to compete on price or volume due to foreign manufacturers' subsidies and manufacturing capabilities," notes Goldstein. "Developing and maintaining working relationships with end users after product delivery can help ensure that they maintain market share over the next five years."

The High Voltage Cable and Overhead Conductor Market in South Africa is part of the Energy & Power Growth Partnership Services program, which also includes research in the following markets: Sub-Saharan Africa Gas Turbine Market, Strategic Growth Plans of Power Utilities in Sub Saharan Africa, South African Metering Systems Market, and Renewable Energy Market in South Africa. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.

The High Voltage Cable and Overhead Conductor Market in South Africa / M4A3

 
 
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Power Plant Upgrades in South Africa Charge Up Local Manufacturers of High Voltage Cables and Overhead Conductors Finds Frost & Sullivan

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