General Cable Corporation (BGC) expanded its business geographically in the Mediterranean and North African region with the acquisition of BICC Egypt, manufacturer of diverse type of wire and cable products for the electrical markets. Generating about $30 million of annual revenue, BICC Egypt’s products range from insulated power and control cables, building wire, instrumentation cable, halogen free power and control cables to overhead power cables.
The Mediterranean and North African region is one of the leading and hastily expanding markets of the world. General Cable’s setup of a production and commercial base in this region provides it with a huge opportunity to expand its business. The company is actively engaged in grabbing rising opportunities in the Mediterranean and African markets, striving to derive maximum benefits from these lowly exploited developing markets.
Rising investment in infrastructure and power generation projects, a growing population, and a favorable GDP outlook in Egypt has surged the demand for wire and cable products in the country. Infrastructure development activities are on a rise with the increasing population. The demand for power is expected to rise at double the rate of average worldwide demand.
The company plans to provide its services to the domestic Egyptian market and also plans to meet the regional wire and cable demand. General Cable, with its solid footing in Algeria, Egypt, Angola, Zambia and South Africa, has become a leading manufacturer of power cables in the Mediterranean and North African region as well as the Sub-Saharan region.
Over the long term, the company is expected to benefit from its position as one of the world’s leading providers of wire and cable for electrical utilities, industrial electric infrastructure, construction, and telecommunications end markets. Over the last decade, the company has completed a number of acquisitions that have broadened its geographic reach and depth of product offerings, which will help limit its earnings volatility. In addition, General Cable’s strong management team, focus on continuous cost reductions, and scale advantages will likely provide a solid foundation for its long-term earnings growth.
However, the markets for all General Cable’s products are highly competitive. Though competitive factors for the company’s products vary across the different product categories, the principal factors influencing competition are generally price, quality, breadth of product line, inventory availability, and delivery time and customer service. A major competitor of General Cable is Sumitomo Electric Industries Ltd. (SMTOY.PK).
Based in Highland Heights, Kentucky, General Cable Corporation is a global leader in developing, designing, manufacturing, marketing, distributing and installing copper, aluminum, and fiber optic wire and cable products. The company’s products are for the energy, industrial, specialty, and communications markets.
We have a Zacks Rank of #3 (short-term Hold recommendation) on General Cable.
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