The country's cable industry was badly hit by the 1998 crisis. Until 2004, utilization of the production capacity of the industry was only around 25%- 30% of installed production capacity. The industry began to revive only in the past three years starting 2006. In 2007, the country's cable production totaled 300,000 tons or 65% of the installed capacity of 445,000 tons. Brisk developments in the power sector and growing exports have also boosted the industry lately.
The fast growing demand for electricity has forced the government to launch am ambitious plan called crash program to build coal fired power plants with a total capacity of 10,000 megawatts to be completed in 2010-2011. The program is to be followed with a second phase with the same capacity. The first program is in progress pushing up demand for electric cable.
Demand for cables has increased not only n the domestic market but also in export market such as Middle East. The oil rich region, which earned windfall profit with the soaring price of oil since 2006, is safe from the impact of the global financial crisis. Property and infrastructure development continue to be brisk in Middle East. The projects need large supply of electric cables including transmission and distribution cables.
The revival of the cable market in 2007 and 2008 was reflected by the financial performance of listed cable producers. PT Sumi Kabel reported sales at only Rp.976 billion in 2004. In 2006 it sales shot up to Rp1,914 billion . Similarly, sales of PT Supreme Cable (SUCACO) surged to Rp2,281 billion in 2007 from Rp1,483 billion in 2006.
A setback, however, came toward the end of 2008 when sales began to sink including in export market. As a result of the global financial crisis.
Increase in the prices of basic materials like copper contributed to the problem faced by cable industry lately. Many cable producers suffered losses on foreign exchange as they bought the basic materials in US dollar the value of which surged facing the rupiah.
Despite the gloomy outlook lately, the prospects for cable industry are still encouraging in the country with the big plan of the government in the electricity sector.
Types of cable
Cable industry in Indonesia has expanded and could produce various types of cable electric cable, telecommunication cable, control cable, fiber optic, etc.
Electric cables consist of different types by voltage High Voltage (HV), Medium Voltage (MV), and Low voltage. Electric cables could also be divided into Bare Aluminum Conductor and Bare Copper Conductor. Generally bare cables are aerial cables having extra high, high and medium voltage .
Almost all large cable producers such as PT Sucaco, Sumi Indo Kabel, Voksel elektrik, produce all types of cables both electric cable, telephone cables, and fiber optic.
Each cable has an identity showing the type of conductor, type of isolator, types of insulator, etc. Cable with NYY code is cable with copper conductor (using the code of N), PVC isolator, in two layers ( YY code)
Cable could have several types of conductors and isolators and with toughening material or protector from steel tape. For example, high voltage underground cables are apart from a number of layers of isolator, are also given steel tape protectors to protect them from being damaged from possible impact of hard or sharp material . See the following table.
The cable products of Sucaco include low voltage, medium voltage and high voltage. Apart from electric and telephone cables, Sucaco produces enameled wires, which include Polyvinyl Formal Copper Wire, Polyester-imide Copper Wire, Polyester Copper Wire, Polyurethane Copper Wire, Polyester Nylon Copper Wire, and Polyester Amide Imide Copper.
Standardization of cable
The government has determined 11 national standards for cable such as SNI determined by the industry ministry including SNI 04-2697-1992 and SNI 04-3234-1992. SNI 04-2697-1992 is used for electric cables using XPLE as isolator and electric cable having voltage raging from 1 kV to 30 kV. SNI 04-3234-1992 is used for flexible cable isolated and sheathed with PVC having nominal voltage of 500 V (low voltage) that is the type of NYMHY
The SNI was determined in 1988 through a decision of the industry and trade minister No. 407/M/SK/10/1980 on the application of Indonesian industrial standard (SII) and the use of SII for six types of low voltage standard electric cable and in 1988 had through a decision of the Minister No. 74/M/SK/2/1988 required the use of SII and the SII mark for 5 types of flexible electric cable : SII.2256-87; SII.2257-87; SII.2258-87; SII. 2259-87 and SII. 2260 -87.
Starting 1992 , SII was changed with Indonesia National Standard (SNI) base don a decision of the Industry and Trade Minister.
Cable producers and production capacity
After the 1998 crisis , there was almost no addition in the number of cable factories and installed capacity. The member of the association of cable producers (APKABEL), which groups almost all cable factories in the country did not change much . In 1997 , there were 35 members of the association and 2006, the number slightly declined to 34 companies.
Base don official data at the industry ministry , among 48 registered cable factories in 2005 , only 33 were in operation.
Number of cable factories grouped in Apkabel
" 1974 = 5 companies
" 1997 = 35 companies
" 2000 = 35 companies
" 2002 = 36 companies
" 2005 = 33 companies
" 2006 = 34 companies
The production capacity of the country's cable industry has not changed much since 2004. Base din data at APKABEL the production capacity is around 445,000 tons a year for all types of cable .
Most cable factories date back to year before the 1998 crisis. Low demand caused factories to operate much below their production capacity. Increase began only in 2005 to peak in 2007 . New investment began in cable industry that year including for capacity expansion. A Malaysian company, PT Wonderful Wire and Cable , built a factory in Medan . Another foreign company PT Prysman invested for capacity expansion.
Currently there are 15 major cable makers in Indonesia . Most of them are old companies like PT Tranka Kabel that came on line in 1952. PT Sumi Indo Kabel Tbk (Perusahaan) was established on 23 July 1981, with the name of PT Industri Kawat Indonesia. The name of the company was changed with PT IKI Indah Kabel Indonesia in 1982.
PT Voksel Electric Tbk was established in 1971 . Later its status was changed into a foreign investment (PMA) company after establishing cooperation with Showa Electric Wire & Cable Co. Ltd from Japan. There are six publicly listed cable makers -- PT Supreme Cable Manufacturing and Commerce TBK (SUCACO), PT Sumi Indo Kabel, PT Kabelindo, PT Voksel Electric, PT KMI Wires and Cables and PT Jembo Cable.
Cable producers operate at high capacity
The country's cable industry was hit hard by the monetary crisis in 1997/1998 on falling demand . Capacity utilization was only 25%-30% . The condition improved only in 2004 and 2005 , when the country's economy began to recover from the crisis. The growth of the industry peaked in 2007 when the government launched its 10,000 megawatt crash program in the electricity sector pushing up demand for electric cables. Demand also rose in export market notable in Middle East where the construction sector was brisk amid the soaring oil prices. Strong demand in 2007 resulted in an increase in capacity utilization of the country's cable industry to 65%-70%.
The capacity utilization was expected to scale up further in 2008 to around 90% of the total installed capacity of 445,090 ton, if the crash program in the electric sector ran as expected.
A faster growth was recorded in the production of electric cable to follow the brisk development in the electric sector. Meanwhile, almost all telephone operators including state telecommunication company PT Telkom Tbk use fiber optic cable in their new projects. All producers of metallic cable could produce fiber optic cable. The government has a big telecommunication project, Palapa Ring, using fiber optic cable.
Toward the end of 2008, demand for cables began to decline as a result of the global economic slowdown and crisis. Many large property projects including development of new cities in Middle East have been shelved.