The Middle East and Africa’s (MEA) low voltage cables market is anticipated to reach a value of $2.7 billion by 2020 owing to growth in various sectors of the economy, according to Grand View Research.
The substantial growth in commercial and residential applications is anticipated to help the low voltage (LV) cables market to witness a healthy revenue growth in the Middle East, the report said.
The growth in construction, power, renewable energy, telecommunication lines, airports, and metros are expected to drive the LV cables sector, it said.
The low voltage cables market has witnessed steady growth in demand over the last few years owing to rising applications across industrial and residential areas. High demand from different application areas such as lighting, automation, video surveillance, infrastructure, fire safety, and sound and security is poised to impel the business opportunities, it said.
Low voltage cables and wiring supports home wiring and cabling infrastructure and digital technologies from telephones to various complex infrastructures like multiple televisions and video streams.
Low voltage cabling is installed to provide support to multiple hardware systems. When it comes to the demand pattern for low voltage cables in Middle East, majority of market share is held by oil and gas. There is a constant requirement for quality assured products. This factor is anticipated to boost innovation in the market in terms of technology and research and development.
Apart from oil and gas, researchers expect the Middle East region to witness impressive growth across other industries such as automotive, construction, and non-automotive sectors. The two major trend observed in the region include -
•The large scale projects to replace old transmission lines with the newer and advanced cables for enhanced safety;
•Investments in smart grid for strong power transmission and distribution (T&D) network in the region.
Both these factors are expected to propel the market demand in the region and present the top players with attractive business opportunities in the years to come.
Researchers suggest that immense rise in demand for power in commercial, industrial, and residential segments can positively influence the demand for low voltage cables in Middle East, GCC countries like UAE and Saudi Arabia, and Asia Pacific and Africa.
Governments from developing countries are focused on making heavy investments in infrastructure and overall economic growth. Rising research and development projects and increased funding for innovative projects can drive the demand for industries like low voltage cable in the forthcoming years.
Investments from global leaders can further drive the expansion opportunities in the regional market, suggest expert researchers. The commercial sector is particularly driven by impressive growth of the construction industry in the region.
Increasing investments in power and renewable energy have influenced the market and is anticipated to fuel the low voltage cable market growth. For instance, The King Abdullah City for Atomic & Renewable Energy in Saudi Arabia is planning to construct 16 nuclear reactors by 2040.
In addition, Egypt and Jordan have signed contracts with Russia’s Rosatom to build nuclear reactors. These investments in power generation fuel the market. Feed-in tariffs have positive impact on the market where the governments pay producers to supply additional power to national grids. Various governments are expected to move towards the financing models assigned for private sector, which includes Independent Water and Power Projects (IWPP) and Independent Power Plants (IPP). These models help in electricity generation on a commercial scale.
In the light of the upcoming 2022 FIFA World Cup that is to be held in Qatar, the Middle Eastern countries are gearing up for a boom is construction and infrastructural development activities. Apart from the projects directly connected to the event venues, new concepts and emerging planning are anticipated to boost investments as well as business opportunities in commercial buildings, restaurants, commercial vehicles, and others. This is anticipated to propel demand for low voltage cables in the region over the years to come. The low voltage cables market in Qatar is anticipated to grow at the CAGR of 6.6 per cent over the forecast period.
High demand for from power generation and transmission, instrumentation cables, switchgears, industrial robotics, petrochemicals, and other segments can further shape the demand pattern in near future. There has been an unparalleled demand for cables from this region driven by rising power generation, buoyant construction sector, and rapid growth in population. Market leaders like Ducab, El-Sewedy, Saudi Cables, Jeddah Cables, and Riyadh Cables are accompanied by numerous new entrants.
To ensure availability of raw materials, most companies are collaborating with suppliers to stock raw materials. Grand View Research, however, cautions about volatile prices of raw materials and transforming market dynamics. Researchers suggest increased focus on customer service, innovation in terms of product portfolio, and strong after sales services. Rising emphasis on eco-friendly products is also expected to create business opportunities for the market players in the forthcoming years.
Business partnerships, mergers and acquisitions (M&A), and joint ventures are some of the major business strategies adopted by the players in the low voltage cables market. For instance, Ducab recently delivered a requirement of low and medium voltage cables of around $10 million. This order was delivered for North East Bab Field Development Project, Phase III: Rumaitha and Shanayel fields.
The opportunities in developing and emerging economies for industrialization and urbanization are major reasons for increasing growth of cables in developing regions. The need for power grid interconnections in areas that are densely populated are creating a demand for submarine and underground cables. Developed regions such as North America and Europe are replacing overhead cables with underground cables due to space constraints and to ensure reliable transmission of electricity, it stated.