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Marine Cable Market: Big Opportunity for Local Content Development

-By Yange Ikyaa

Today, the value of Coleman Cables, a Nigerian cable manufacturing company, is well in excess of N25 billion and still growing, according to data sourced by Valuechain from the company. In 2009, the company had 120 staff and today it is employing about 400 people and still growing. It runs one shift of production a day with 90 per cent of its funds coming from commercial banks, especially working capital. The company says it has the ability to employ over 8,500 people at full capacity production, if government is patronizing local businesses such as theirs.

“The real sector can develop Nigerian economy if the government decides to focus on those companies that can create employment and generate more jobs. For the real sector to expand and create more jobs government needs to reduce cost of borrowing, commercial borrowing cannot sustain manufacturing companies because it is very expensive,” said George Onafowokan, the CEO of Coleman Cables.

Today, Coleman is the pioneer for quite a lot of products not only in Nigeria but also in West Africa. It is the first and only producer in West Africa of insulated high voltage cable up to 33KV, and is also the pioneer producer of CAT 5 and CAT 6 network cable that is used for local area network production and telecommunications in West Africa.

The company is the first producer of TV/video cable which is used for TV antennae connections and cable satellite as well as other products. Those are the three major pioneer products it has in West Africa. In terms of DC flexible cable, Coleman is the biggest producer in West Africa and it does the biggest sizes.

Considering the high voltage cable, the company is the sixth country in the continent to produce this. In East Africa, Central Africa and West Africa, it is the pioneer of the large majority in this area. Prior to that, you could only get the Insulated High voltage cable in North Africa or South Africa.

In 2014, the Sagamu factory became a pioneering factory for wire and cable not only for Nigeria but also for Africa and Coleman became part of the league of high distribution cable producers in the continent.

“I believe that as Nigerians and Africans, we can aspire to be better than what people think we are or what they expect of us. I am always proud of my country and that has always helped me to achieve the unimaginable locally than continuing to be seen as a country that can achieve not more than what is expected,” said Onafowokan.

The requirements for marine cables in shipbuilding are growing due to the increasing demand for low weight and high efficiency. Ship cables have to be installed in narrow spaces demanding highest cable flexibility. Furthermore, marine cables often have to be halogen free, flame retardant and self-extinguishing.

Ship cables are not allowed to enhance flame propagation. Additionally maritime wires should have a low own weight and besides correspond to different international approvals. Those special requirements of ship building technique can´t be fulfilled by sub-standard products and thus require custom-made solutions for ship builder.

Marine cables unite the special requirements of shipbuilding technique and offer customers highest utility. Due to the numerous approvals as for example Germanischer Lloyd (GL), American Bureau of Shipping (ABS), Lloyd´s Register (LR) and Registro Italiano Navale (RINA) those cables are especially appropriate for use on ships, yachts and offshore equipment.
Since the first underwater cable was implemented in 1850 to deliver telegraphy traffic, marine cables and connectors have been playing a vital role in the integration of various sub-systems and systems across a number of industry verticals.

In recent years, the vast rise in the demand for reliable high performance, connectivity, and efficiency has been enhancing the growth of the marine cables and connectors market. Fiber-optic cables are being widely adopted in the telecommunication industry due to their advantages such as efficient data transfer and high-speed data transfer capabilities.

According to Transparency Market Research, the global marine cables and connectors market was estimated at US$ 8.86 billion in the year of 2016 and is anticipated to expand at a CAGR of 5.3% throughout the forecast year from 2017 to 2025.

Transparency Market Research (TMR) is a market intelligence company, providing global business information reports and services. Our exclusive blend of quantitative forecasting and trends analysis provides forward-looking insight for thousands of decision makers.

TMR’s experienced team of analysts, researchers, and consultants, use proprietary data sources and various tools and techniques to gather, and analyze information. The company’s offerings represent the latest and the most reliable information indispensable for businesses to sustain a competitive edge.

The global marine cables and connectors market has been segmented on the basis of type, underwater depth, end-use industry, and geography. On the basis of type, the market is broadly analyzed for cables and connectors. In 2016, the segment of cables accounted for the maximum market share in terms of revenue. The segment is also estimated to witness the most promising growth opportunity over the report’s forecast period. The connector segment is also expected to show substantial growth during the forecast period due to rise in applications with advancement in power transmission and telecommunication industry.

In terms of underwater depth, the marine cable and connector market is segmented into beach joint 1, beach joint 2, burial, and freelay. In 2016, the beach joint 2 segment held the dominant share in the global market and is also expected to expand at a high CAGR during the forecast period. This is mainly due to the vast increase in installation of power and telecommunication network lines in this under-water depth.

Based on end-use industry verticals, the market is segmented into oil and gas, military and defense, telecommunication, and power transmission. In 2016, telecommunication industry accounted for the dominant market share, and is also predicted to expand at a healthy CAGR during the forecast period.

Geographically, the global marine cables and connectors market has been segmented into North America, Europe, Asia Pacific, Middle East & Africa and South America. Europe held the dominant share in the market, chiefly owing to the early adoption of marine cables and connectors, followed by Asia Pacific, in 2016.

The market in Asia Pacific is likely to outpace other regional markets over the forecast period owing to extensive investment in telecommunication application and a massive rise in infrastructure upgrade activities across data centres.

North America is projected to witness strong growth owing to the presence of several technology giants in the U.S. The vast rise in infrastructure upgrade activities owing to the global expansion of companies such as Facebook, Google, and Microsoft will lead to promising growth opportunities.

Coleman Cables

The market in South America is expected to showcase slower growth in the marine cables and connectors market compared to other regions.

Some of the leading companies operating in the global marine cables and connectors market are Sea and Land Technologies Pte. Ltd., TE Connectivity, Inc., Eaton Corporation Plc., Fujitsu Limited, SAMCO Inc., Molex, Scorpion Oceanics, Hengtong Optic-Electric Co., Ltd., Teledyne Marine, Huawei Marine, SEACON, HESFIBEL, Axon Cable, OCC Corporation, General Cable Company, ZTT Corporation, and Nexans.

With the leading ten companies collectively accounting only for about 50% of overall share, the vendor landscape of the global marine cables and connectors market hints at a high level of fragmentation and intense competition, observes Transparency Market Research in a recent report. Owing to the large number of companies in the market, competition is likely to remain intense in the next few years as well.

Vendors operating in the global marine cables and connectors market can expect a massive rise in innovative products and technological advancements as more and more companies look at revising their growth strategies to remain competitive in the market.

Attempts at consolidating their positions in the market through strategic mergers and acquisitions and expansion across emerging regional markets could also remain key growth strategies adopted by leading players.

Some of the most prominent vendors in the market are Fujitsu Limited, Eaton Corporation Plc., TE Connectivity, Inc., Teledyne Marine, Scorpion Oceanics, SAMCO Inc., Molex, Huawei Marine, and General Cable Company.

It is estimated that the global marine cables and connectors market will register a healthy 5.3% CAGR over the period between 2017 and 2025, rising from an opportunity of US$8.86 billion in 2015 to US$14.08 billion by 2025.

Of the two key types of products that the global marine cables and connectors market vends – cables and connectors, the segment of cables held the dominant share in the overall market in 2016. The segment is likely to remain the leading revenue contributor to the overall market over the forecast period as well, exhibiting a 5.7% CAGR. The segment of connectors is likely to remain stagnant.

The market in Europe presently dominates, accounting for over 30% of the overall revenue generated by the global market in 2016. This is chiefly attributable to the rising demand for reliable and energy efficient fiber-optic cables with good performance as the telecom sector pushes boundaries and looks forward to provide high-speed connections to users. Over the report’s forecast period, the market in Asia Pacific could provide promising growth opportunities, with China remaining a key contributor to the overall growth of the market.

A number of factors are likely to aid the overall expansion of the global marine cables and connectors market, including the massive wave of investments in the field of marine connectivity from telecom companies and governments with the view of improving and expanding inter- and intra-country telecom networks.

The rising global demand for higher and more reliable bandwidth for effective and faster transmission of data and vast investments from the defence and military sectors are also expected to drive the market in the near future. The vast rise in data centres across the globe is also expected to favour the overall uptake of a variety of marine cables and connectors.

Moreover, the rising penetration of innovative technologies such as Internet of Things and cloud across a number of industries and vast growth opportunities owing to the increased focus on improving telecommunications infrastructure across several emerging economies could also prove to be beneficial for the global market. Nearly half the market is held by small-and medium-sized companies.