French firm Nexans, one of the world's leading cable manufacturers, announced the opening of its new cable plant in Shanghai yesterday, the company's largest investment in China.

The newly-established 22 million-euro (US$28.6 million) Nexans (Shanghai) Wires and Cables Co Ltd is open for business after nine months of construction and equipment testing.

The plant will increase the competitiveness of Nexans as it battles local and international players in the Chinese market as demand for high-tech cable products soars.

"This facility is a production centre in China for special industrial cables and has been established in response to fast growing local market demands as well as our customers' increasing pressure to provide localized products and services," said Doug Anderson, country manager of the China operation of Nexans at the opening ceremony yesterday.

The company plans to increase its sales revenue in the Chinese market to 5 billion yuan (US$602 million) by 2010, from the 838 million yuan (US$100 million) it recorded last year, according to Anderson.

It also expects its Asian sales to account for 10 per cent of its global revenue within three to five years, doubling from the current 5 per cent, said Gerard Hauser, chief executive officer of Nexans.

"China's sales will account for more than half of our Asian revenue within the same period," Hauser told China Daily in an interview after the press conference.

Through their expansion plan in China, Nexans will also acquire some local cable companies or set up more joint-ventures in a couple of years, Anderson said.

Covering an area of about 50,000 square metres in the country's commercial hub, the new plant currently employs about 80 people.

In the first phase of the Shanghai plant's production plan, shipboard cables, rolling stock cables, cables for nuclear power plants and safety building cables will be manufactured. Annual turnover is expected to top 15 million euros (US$19.5 million) by 2009.

Further products are expected to roll off the production line once second-phase facilities have been constructed.

The world-class cable manufacturer first got a foothold in China during the 1980s, and has continuously strengthened and developed product localization in the country.

Nexans has set up three industrial ventures since 1994, as well as a logistics centre to support its sales delivery in the region.

Since first making inroads into the Chinese market, Nexans has participated in a wide range of large projects in the country's power, transportation and petrochemical industries.

These include the construction of the Shanghai maglev train - the world's first maglev express for commercial use - the building of China National Offshore Oil Corp's offshore oil exploitation facilities and its liquefied natural gas terminals, as well as the enhancement of the subway systems of Beijing, Shanghai and Guangzhou.

Source: China Daily