FEIC Launches Rubber Insulated Industrial Cable JV in China

Furukawa Electric Industrial Cable (FEIC), a wholly owned subsidiary of Furukawa Electric to manufacture industrial cables, announced on Wednesday the firm establishes a joint venture company, Huatong Furukawa (Tangshan) Cable, to produce rubber insulated industrial cables. The JV partners are Hebei Huatong Wires & Cables Group, Chinese local electric cable maker, and Shenyang Furukawa Cable, Furukawa Electric’s another 100% subsidiary to manufacture extra and ultra high voltage power cables. The JV plans to supply rubber insulated cables mainly for mining machines and wind power generators and targets annual revenue at 9.5 billion yen in 2011 and 13.4 billion yen in 2015.

The three companies signed a JV contract on July 16. Capital fund is US$ 19 million, 55% held by Hebei Huatong, 30% by FEIC and 15% by Shenyang Furukawa. The JV takes over a factory dedicated to rubber insulated cable production with concerned 200 employees from Hebei Huatong. FEIC will provide productive technologies, especially insulating technology for above 15kV mining cables, and increase the sales both in China and for export.

Rubber insulated cables are mainly used for moving parts of industrial machines due to its high resistance against flex and environment. Hebei Huatong’s annual revenue was 4.5 billion yen for mining cables and 500-600 million yen for oil well cables in the total revenue of 7.7 billion yen (600 million yuan) in 2009. In 2015, the JV targets 7 billion yen sales for mining cables and above 1 billion yen for oil well cables. The JV also aims to supply rubber insulated cables for wind power generators at 3 billion yen and high speed railway cars at 1 billion yen in 2015.

The JV plans to construct an additional factory and expand productive capacity by 50% in 2014-2015.