Downstream Demand for Copper and Substitution in ASEAN: A Perspective from the Wire & Cable Industry International Copper Study Group Meeting Lisbon, Portugal, 31 March 214 Philip Radbourne Director Research Wire & Cable Team Integer Research Ltd
ICSG, Lisbon, March 214 Presentation Structure Introduction Global Wire & Cable industry ASEAN Cable market Substitution threats to copper Conclusions questions & answer session
ICSG, Lisbon, March 214 About Integer Research Founded in 22,, Integer is a leading consultancy in the wire & cable sector. We have offices in London, Beijing, Tokyo and Detroit Integer has a significant level of understanding of global wire & cable markets based on many years of market research undertaken on behalf of clients We serve clients with a variety of methods: bespoke research commissioned by individual clients as well as regular multi-client products enabling benchmarking, competitor and market analysis. We also host an Advanced Cable conference series, in China and the Middle East
World GDP has been turning a corner, most of Europe and USA recovering ering in 213 GDP % change quarter on quarter Global l economy starting ti to pick-up steam 2 21 22 23 24 25 26 27 28 29 21 211 212 213 Source: Integer, Bloomberg, IMF ICSG, Lisbon, March 214
Eurozone manufacturing finally heads above water in Q4 213 Markit Eurozone PMI (>5 denotes expansion) Sentiment t finally improving across Europe, even Spain out of recesson 28 29 21 211 212 213 Source: Integer, Bloomberg, Markit ICSG, Lisbon, March 214
ICSG, Lisbon, March 214 About our new ASEAN: Focus Report The ASEAN market is one of the most dynamic and promising wire and cable markets in the world. Integer s new report tracks this important emerging market and is the essential tool to help you understand: o The regional producers Product mix Market share Capacities Financial State Their Customers o Trade Imports, Exports, Production & Consumption 27 218 Value, Gross Cable Weight & Conductor Weight o Macroeconomics of the region o Demand & Supply Wire & Cable forecast up to 218
ASEAN has been one of the strongest regional economies in the last 5 years US$ billion 5 Vietnam Thailand Singapore 5 Philippines Malaysia Indonesia 5 ASEAN crisis i Great Recession 199 9 199 91 199 92 199 93 199 94 199 95 199 96 199 97 199 98 199 99 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 1 11 12 2 2 2 Source: Integer, World Bank, Bloomberg ICSG, Lisbon, March 214
It has vast mega cities, which all consume large amounts of cable US$ billion Bangkok Singapore Kuala Lumpur Saigon Jakarta Makati, Manila Source: Integer, World Bank, Bloomberg ICSG, Lisbon, March 214
ICSG, Lisbon, March 214 ASEAN consumption has increased steadily in the last five years ASEAN wire and cable consumption by country, 27-213 US$ million +8% Laos Cambodia Brunei Myanmar Philippines Singapore Vietnam Malaysia Thailand Indonesia 27 28 29 21 211 212 213
ICSG, Lisbon, March 214..we also analyze the market by gross cable weight and conductor weight ASEAN wire and cable consumption by conductor weight, 27-213 tonnes Copper Aluminium +8% 27 28 29 21 211 212 213
We provide a detailed view of products consumed and produced within the ASEAN market ASEAN wire and cable consumption by product, 27-213 US$ million 27 213 +17% CAGR +22% CAGR Fibre optic cable Telecom & Data Cables Signal & Control Cable Enamelled/Magne Coaxial twire cable/electroni c wire Power Low Voltage Cable - Energy >1kV, MV, <1kV HV, EHV ICSG, Lisbon, March 214
US$ million Coverage of 7+ companies within this report with plant locations, market share and capacities by product for 212 ASEAN wire and cable revenues by company, 212 Leader Universal PT SUCACO Bangkok Cable Tranka Kabel Thai-Yazaki Electric Wire LS Vina Cable PT KMI PT Voksel Electric Phelps Dodge Thailand Charoong Thai CADIVI Tai Sin Electric Hitachi Cable Singapore PT Sumi Indo MCI-Draka Cable Fujikura Federal Cables Thai Hitachi Enamel Wire PT Jembo Cable Phelps Dodge Philippines Yazaki Torres ICSG, Lisbon, March 214
Competition and falling margins are likely to lead to consolidation in some ASEAN wire and cable markets US$ million 2,5 Indonesian insulated wire and cable producer share by company based on 212 cable revenues 2,372 2, 672 1,5 56 28 28 24 14 32 111 59 57 135 94 1, 231 5 31 285 238 Over 7 companies PT SUCACO Trankaa Kabel PT KMI PT Voksel Electric PT Sumi Indo PT Jembo Cable PT Kabelindo Murni Sumitomo Electric Wintec Ewindo Cable Citra Cable BICC Berca Cable Olex Indo Prysmian Cables Indonesia Furukawa Optical Solutions PT Star Impactama Other Total ICSG, Lisbon, March 214
ICSG, Lisbon, March 214...and compare regional macroeconomics with global trends 25 Singapore Cable con nsumption per ca apita (US$) 2 15 1 5 Vietnam Philippines India Thailand Malaysia Romania ChinaTurkey Brazil Chile Indonesia Russia Saudi Arabia South Korea Italy France Germany United Kingdom Japan Sw eden United States Canada Australia Cambodia 1 2 3 4 5 6 7 8 GDP per capita (US$)
ICSG, Lisbon, March 214 We give a view on the projects that will have a substantial impact on wire & cable demand Indonesia is embarking on ambitious plans to deploy a broadband network covering approximately 3% of households by 215
ICSG, Lisbon, March 214...to help us give a 5 year forecast for the region. tonnes +6% Copper Aluminium We expect the ASEAN wire and cable consumption to top 1 million conductor tonnes by 218 213 214 215 216 217 218
ICSG, Lisbon, March 214 Final considerations: ASEAN cable makers face both threats and opportunities Opportunities Sustained future economic growth High degree of government-led investment Strong regional manufacturing base Increasingly complex demand needs Power cable demand Specialty cable demand Fibre optic cable demand Need for consolidation offers acquisition targets Threats X X X X X X X Highly competitive markets Low margins in lower value products Growth, although still strong, is in some cases slowing down Delays affecting some infrastructure investments High copper prices and volatility Import competition from China Threat of natural disasters and political instability
Thank you for your attention Any yquestions? Philip Radbourne Philip.Radbourne@integer-research.com h +44 ()2 753 1265