Power Plant Upgrades in South Africa Charge up Local Manufacturers of High Voltage Cables and Overhead Conductors, Finds Frost & Sullivan

CAPE TOWN, South Africa, April 29, 2010 - The beleaguered South African high voltage cables and conductors market
has received a fillip with power utility Eskom launching a massive
infrastructure development drive. The US$1.532 billion power plant
integration and grid strengthening programmes offer a plethora of
opportunities to cable manufacturers, as these plants need to be connected to
the main transmission grid infrastructure.

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New analysis from Frost & Sullivan (www.energy.frost.com), The
High Voltage Cable and Overhead Conductor Market in South Africa, finds that
the market earned revenues of US$1.47 billion in 2009 and estimates this to
reach US$3.59 billion in 2015. The advancements in cable and conductor
manufacturing materials are expected to improve efficiencies and reduce
production costs significantly over the next decade.

If you are interested in more information on this study, please send an
e-mail to Patrick Cairns, Corporate Communications, at
patrick.cairns@frost.com, with your full name, company name, title, telephone
number, company e-mail address, company website, city, state and country.

"Many African countries including Botswana, Zimbabwe, Angola, Mozambique,
Namibia, Democratic Republic of Congo, Kenya, Mauritius and Ethiopia are also
embarking on developing new power generation infrastructure," says Frost &
Sullivan Research Analyst Marc Goldstein. "This all has to be integrated into
the existing grid infrastructures. Local cable manufacturers will be keen to
have a share of this pie."

Market participants will also feel buoyed by the average age of equipment
in the transmission network. The government will be looking to maintain the
integrity of the network by regularly replacing the existing networks, most
of which are 31 years old, and some more than 50 years.

Despite such active support from Eskom, local cable and conductor
manufacturers are feeling the heat of the competition from low-cost imports
manufactured in Brazil, China, India and Zambia and are struggling to
maintain their market positions. They also have to deal with decreasing
tariffs and free trade agreements (FTAs), and these market dampeners are
compelling them to find novel ways to hold on to their market shares.
However, their major challenges are the funding uncertainty for key end users
and working capital constraints, which place added pressure on production
processes and product pricing.

"Uncertainty regarding demand forecasting and illiquidity in working
capital can have considerable impact on local manufacturers that hold large
quantities of stock in raw materials to meet customer demand," says
Goldstein. "Eskom's inability to raise adequate capital to fund their
development programmes has led to festering apprehensions about future
contracts."

Manufacturers have reacted to the uncertainty by imposing tighter
controls over operations by reducing headcount, mothballing production
facilities and investing in increasingly advanced production tolls to boost
efficiency.

Apart from improving production efficiencies, cable manufacturers also
have to focus on providing extensive, value-added and radical business
services to key end users to stay afloat in the market.

"They will not be able to compete on price or volume due to foreign
manufacturers' subsidies and manufacturing capabilities," notes Goldstein.
"Developing and maintaining working relationships with end users after
product delivery can help ensure that they maintain market share over the
next five years."

The High Voltage Cable and Overhead Conductor Market in South Africa is
part of the Energy & Power Growth Partnership Services program, which also
includes research in the following markets: Sub-Saharan Africa Gas Turbine
Market, Strategic Growth Plans of Power Utilities in Sub Saharan Africa,
South African Metering Systems Market, and Renewable Energy Market in South
Africa. All research services included in subscriptions provide detailed
market opportunities and industry trends that have been evaluated following
extensive interviews with market participants.

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    The High Voltage Cable and Overhead Conductor Market in South Africa
    M4A3

    Contact:
    Patrick Cairns
    Corporate Communications - Africa
    P: +27-18-464-2402
    E: patrick.cairns@frost.com

www.frost.com

Patrick Cairns, Corporate Communications - Africa of Frost & Sullivan, +27-18-464-2402, patrick.cairns at frost.com