Fireside Chat: Exploring the Growth and Opportunity in the Wire and Cable Market

While often considered a mature market niche, wire and cable is a growing segment of the plastics industry, expected to experience a four-to-five percent compounded growth rate over the next five years. Wire and cable was the subject of M. Holland’s first Plastics News Fireside Chat series of 2018, which featured three industry experts discussing the latest trends, advancements, and opportunities in the wire and cable market: Paul Lorigan, Technical Director at T&T Marketing, an M. Holland Company; David Lindsay, Marketing Manager, Energy at Borealis; and Dave Watson, Director of Engineering at Belden/Alpha Wire.

Many factors have contributed to the growth in the wire and cable market, but the following three were most referenced by the expert panel:

1. Environmental factors: Extreme weather events over the past few years have presented many challenges and opportunities for the wire and cable market. Lorigan noted that T&T Marketing experienced sales growth due to the need of replacing critical infrastructures after damaging storms. In the wake of Hurricanes Harvey, Irma and Maria and the mudslides and fires on the west coast, there is growing demand for underground power lines and cable to prevent mass outages, added Lindsay. “As communities demand more reliability in this technology age, there’s less acceptance for outages due to storms and weather,” said Lindsay.Other environmental factors spurring growth include the expansion of renewable energy, particularly wind and solar, and increased demand for eco-friendly products. Wind turbines and solar systems require significant amounts of wire and cable that must perform under challenging weather conditions and extreme temperatures. All three experts mentioned the need to create and use more low-smoke, zero-halogen compounds to be eco-friendlier. Lorigan mentioned that only 1.4 percent of all polymers in the U.S. are low smoke zero halogen, compared with 15 percent in Europe. The U.S. will most likely get pressured by European companies to change, starting with hospitals, universities and the automotive industry, which are moving toward more eco-friendly materials.
2. Cellular technology advances: Consumer appetite for high-speed data networks tops the list of market influences, according to the panel. “We’re selling a lot of materials to the fiber optic market – a lot of tapes, a lot of filling compounds,” said Lorigan. “That seems to be quite a hot segment for (T&T) right now,” Lindsay agreed, explaining that cellular technology advances are challenging the current infrastructure, including cell tower engineering. “As 5G [networks] get built out, the density of the towers is going to increase. In the past, there’s been a lot of (coaxial cable) in towers, but now it’s all fibers,” he explained.
3. Miniaturization of materials: Manufacturers are demanding lower gauge materials with higher performance capabilities, especially in the automotive and medical markets. Watson provided an example of having to develop coaxial bundles for ultrasounds with 50-gauge wire as a center conductor. In automotive, weight reduction is vital to achieving regulatory efficiency standards, explained Lindsay, so automobile manufacturers are seeking smaller, lighter wire and cable systems for trending electrical and hybrid cars.

MARKET GROWTH NO GUARANTEE OF SUCCESS

But wire and cable’s rapid market growth is no guarantee of success. The market is highly regulated, which creates entry barriers and long product development cycle times. Lorigan described the importance of preparation and anticipating regulatory changes before they happen. As an example, he described how T&T Marketing handled changes in Europe’s RoHS legislation by getting in front of the problem and developing alternative materials to address pending new restrictions.

Competition in the market is strong, so companies must pay close attention to their bottom lines. For Watson and Belden/Alpha Wire, that means staying true to a lean enterprise model and ensuring the company grows incrementally to achieve success. Lindsay agreed with the lean enterprise approach and emphasized the importance of anticipating market changes. He described how Borealis maintains its market leadership by staying plugged into the market and ensuring it has the right people in the right places at the right times.

According to Lorigan, T&T maintains an active product development program to enhance its competitive position. It takes a holistic approach to product development, working with both customers and suppliers to understand the changing needs of the market. Securing talent is also critical to product development success, and Lorigan is particularly impressed with the new generation of engineers and developers coming into the fold. “Young engineers assess information quickly, and bringing them in and applying their creativity and technological skills, upgrades the entire process significantly,” Lorigan said.

Current trends support a continued resurgence of the wire and cable market. However, market growth alone is no guarantee of business success. Competitive players such as T&T Marketing, an M. Holland Company, Borealis and Belden/Alpha Wire must be efficient, innovative and strategic in their approach to the market.

Watch the latest Fireside Chat here. For more information about the Fireside Chat series and to find out when the next episode will air, click here.