For GCC wire and cable makers there is reason for optimism, as the region’s construction industry experiences a period of resurgence thanks to increased infrastructure spending. It is a sharp contrast to the deep recession the region faced in 2009.
The value of infrastructure and real estate projects planned for the GCC up to 2018 is estimated at a surprising US$1 trillion. This in turn will drive demand for wire and cable. According to Integer Research’s Wire & Cable Focus Report: Middle East and North Africa Markets, the GCC cable industry is well-equipped to supply this solid demand, but the local cable makers must evolve to take full benefit.
In recent years, the GCC has experienced double-digit growth in insulated wire and cable capacity, including the entry of new players into the market, such as Bahra Cables, Al Fanar, RESCAB, QICC, El Sewedy (in Saudi Arabia and Qatar), and Power Plus. This new wave of cable makers is challenging the dominance of established local cable producers, such as Saudi Cable, Riyadh Cables, Jeddah Cables, and Ducab.
According to Andrea Valentini, Senior Analyst at Integer, “several new producers are capitalizing on their close business links with end-users. Bahra Cable has strong links downstream to key end-users Saudi Bin Ladin Group and Electric House, and Al Fanar has a long established distribution network in Saudi Arabia and a sister company engaged in EPC contracting”.
Most of the GCC cable makers are rising to the challenge of intensified domestic competition by implementing a range of strategies. Many are increasingly looking to new countries or products to diversify their market risk, such as Ducab’s expansion into high voltage power cables. Others are integrating vertically into raw materials, for example, MESC, Jeddah Cables, and Bahra Cable have all made recent investments in polymer compounding capacity, whilst others are integrating into end-user services, such as turnkey project management offered by Riyadh Cables and Saudi Cable.
“Our analysis indicates that GCC cable companies are evolving to maximise the benefits of a resurgent construction market, and are developing the necessary sophistication to face an increasingly competitive market. Saudi Arabia in particular will have the highest wire and cable consumption growth rate, with 5.4% compound average growth forecast annually between 2012 and 2017,” added Valentini.
About Integer’s Wire & Cable Focus Report: Middle East and North Africa Markets
Integer Research are pleased to announce the launch of this new, ground-breaking study, which identifies likely future developments in the MENA region, analyses the impact of recent events, and forecasts potential demand based on complex demand scenario analysis.