Copper consumption by Taihan Electric Wire Co., South Korea’s second-biggest cable and wire maker, may drop by 4.8 percent this year, a senior company executive said.
“Our copper purchase in 2009 may be 200,000 metric tons, down from 210,000 tons last year,” Kang Hee Jeon, senior executive vice president at the Seoul-based company’s cable business unit, said in an interview yesterday.
Governments worldwide are lowering interest rates and spending trillions of dollars to revive their economies. South Korea’s parliament on April 30 approved a 17.2 trillion-won ($13.8 billion) package, adding to a 50 trillion won stimulus the government allocated over the past year.
The procurement amount estimate was revised from its previous forecast for 185,000 tons as the company’s sales gained by 15 percent more than estimated in its business plan during the first four months following an increase in demand for copper rods from China, Kang said. It procured 25,000 tons of copper in the first quarter.
Taihan Electric has been focusing on valued-added products, such as extra-high-voltage power cables and optical fiber, Kang said. The company posted 30 percent growth in its extra high- voltage power cable business in the past two years, he said.
Global demand for extra-high-voltage power cable may rise by 5 percent annually and 10 percent for optical fiber as the U.S., Europe, the Middle East and Asia plan to invest in power grids and high speed communication networks as part of government-driven stimulus packages, he said.
China’s investment in factories and property surged by more than economists forecast in the first four months in response to the government’s 4 trillion yuan ($586 billion) stimulus package, countering a deepening slump in exports. Urban fixed-asset investment climbed 30.5 percent to the end of April from a year earlier, from 28.6 percent in the first three months, the statistics bureau said May 12.
Exports account for 60 percent to 65 percent of the company’s total sales, Kang said. The company has been trying to expand its export markets from the Middle East and Asia to the U.S., Russia and Australia with overseas production bases in South Africa, Vietnam and Cambodia.
The company received a 190.7 billion won order from Kuwait, it said on April 2. Taihan Electric will supply Kuwait’s Ministry of Electricity and Water with extra-high-voltage cables by January 2011.
The company expects sales for extra-high-voltage cable to increase to 600 billion won this year, up from 450 billion won last year. Last year the company’s sales totaled 2.4 trillion won, of which cable-related sales were 2.2 trillion won, Kang said.
Source: Bloomberg
No comments:
Post a Comment