Oman Cables Industry has performed well across all geographical segments and product categories in the first half of 2018
Oman Cables Industry (OCI) develops, manufactures and markets a variety of electrical cables and conductors. OCI product portfolio includes medium voltage power cables, low voltage power and control cables, fire resistant cables, instrumentation cables, pilot cables, overhead power transmission line conductors and building wires.
In the markets OCI operates, copper is the main material used in electrical cables. Recently, there is a trend towards using aluminum in some market sectors. OCI is carefully monitoring the situation. The company is capable of processing both materials. Cable Industry is characterised by many players in the region. Emerging trend is towards consolidation. Prysmian, the largest cable company in world, owns a majority stake in OCI.
Performance
OCI has performed well across all geographical segments and product categories in the first half of 2018. The slow rise in oil price and its effect on not restarting shelved projects manifested fully in the third quarter of 2018. In the fourth quarter, the slump in oil prices has further added to the pressure.
The margin erosion which was witnessed during 2017 is continuing 2018 and is a serious challenge facing the company.
OCI subsidiary, OAPIL, which has reported loss in 2017 due to disruption caused as effect of declaration of Force Majeure in August 2017 by Sohar Aluminum, the only supplier of input materials to OAPIL, has recovered. However the market for aluminum rods continues to be remunerative.
Looking forward, the lower oil prices and copper price and the geo-political situation is effecting the overall economic situation in the markets where Oman Cables operates. However it is hoped that this situation may reverse slowly. The company expects to maintain its presence in the market and is well equipped to face the challenges. The domestic market may remain active based on the government‘s spend as indicated in the state budget for 2019.
