Business Prospects for Cables Improve in 2024, Here Are the Driving Factors

CORPORATE STRATEGIC - JAKARTA. Several cable companies see the cable business continuing to show positive performance until 2024. This positive trend will be utilized by cable companies to improve performance after in 2022 the demand for cables tended to be stagnant.

The Chairman of the Indonesian Electric Cable Company Association (Apkabel), Noval Jamalullail, said that the prospects for the cable business in 2024 are improving, which can be seen since early 2023.

"Cable orders for several projects from the government, private sector, and retail (general market) have increased close to normal before the Covid-19 period," he told KONTAN on Friday, (16/2).

Talking about prices, Noval said, cable prices remain fluctuating because they depend on the prices of copper and aluminum in the world which are included in international global commodity materials. "However (cable prices) are still at a normal and good level," he continued.

According to him, this is also marked by fluctuations that occur still in the range of approximately 5% where there is no extreme increase or decrease from 2023 until now.

Meanwhile, cable manufacturer issuer PT Voksel Electric Tbk (VOKS) stated that the cable price trend this year has a slight increase. VOKS will take advantage of this price increase opportunity to improve performance.

Voksel Electric Corporate Secretary Masrana said the current cable price trend has a slight increase compared to the price of the previous year. The increase in cable prices touched in the range of 5% - 10% and depends on the type.

He said that Voksel Electric's strategy this year will continue to focus on efficiency and productivity. Voksel also continues to look for breakthroughs for better quality products but from a price perspective can be more competitive.

"Another strategy is that our business value chain will be optimized, considering that our controlling shareholders are world-class cable players," Masrana told KONTAN on Thursday (15/2).

In December 2023, Voksel Electric announced a new controller, a company from Hong Kong, Hengtong Optic-Electric International Co. Ltd. The company from Hong Kong bought VOKS shares as much as 1.78 billion shares or equivalent to 42.97%.

Regarding this year's business target, Marsina conveyed a little conservative for this year's target compared to last year's. This is because it is a political year so the company considers a lot.

VOKS will take advantage of the vigorous construction. If there is an increase in construction trends around the property, the need for cables will automatically increase. This will have an impact on the development of Voksel's business.

Sales in the electric cable sector increased due to the Main Distribution Material (MDU) project and the Balikpapan Refinery Development Master Plan (RDMP). The increase is based on an increase in sales in 2023 and manufacturing cost efficiency.

Cable manufacturer, PT Jembo Cable Company Tbk (JECC) is optimistic that sales performance will increase in 2024. This is inseparable from the number of cable demands predicted to increase compared to last year.

Jembo Cable Company Director Antonius Benady said JECC targets sales targets to grow up to 24% this year. Meanwhile, for net profit, it is targeted to increase around 3.5% to 4% from sales.

"The estimated increase in JECC cable sales is around 24% compared to last year, where the realization of sales before being audited reached IDR 3 trillion in 2023," Antonius told Kontan on Thursday (15/2).

To achieve this target, JECC prepares several strategies, among others, purchasing machines and intensifying the expansion of sales segments.

"The strategy to be carried out is to invest in purchasing machines to increase capacity, as well as expand sales segmentation. The budget prepared is around IDR 75 billion which comes from bank facilities and internal companies," he said.

On the other hand, Antonius explained that the current cable price trend has not changed much, because the raw materials for producing cables are still relatively stable.

"The current cable price has not changed significantly because the price of the main raw material copper is relatively stable. Cable prices depend on the size and type that number in the thousands," he said.

For your information, JECC produces various types of cables, such as low voltage electric cables, medium voltage electric cables, air transmission or distribution cables, telecommunications cables, instrument cables, control cables, electric cables with Metal Corrugated marine cable coatings for Shipboard, Offshore, and other needs, as well as fire-resistant cables and cables with flame retardant capabilities.