Japanese Cable Industry

30 Oct. 2008, Kyoto

Kazuhiko OhashiChairman

The Japanese Electric Wire & Cable Makers’ Association(JCMA)

The Outlook for the copper and copper alloy industry in Japan- The Electrical Sector

1

Agenda

1. Outline of Japanese cable industry

2. Introduction of JECTEC

3. CO2 emissions reduction by increased conductor size

2

Outline of Japanese Cable Industry

(2007)

(Source：JCMA）

Number of Companies ； About 400 (134)

Number of Employees ; 21,600 (Incl. fibre cable)** Ministry of Economy, Trade & Industry (METI)

Production quantity ; 856,000 tonnes (copper) 24,000 tonnes (aluminium)

31,849,000 core-km (fibre)

Turnover ; 1,666,000 million yen (metal) +328,100 million yen (fibre)

= $16,900 million

3

Progress of Domestic ShipmentsProduction Quantity of Wire & Cable (Copper) in Japan

0

200

400

600

800

1,000

1,200

1,400

49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07

Export

O ther D om estic

A utom obile

Pow er

Telecom m unication

Electric M achine & A ppliance

C onstruction & W holesaler

(Thousand tonnes)

(S ouce : JC M A )

4

Production of insulated wire & cable in major countries

（1996～2007）

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

96 97 98 99 00 01 02 03 04 05 06 07

(T housand tonnes -C onductor w eight)

C hina

Italy

Japan

U .S.A

(Souce：IC F)

5

Reasons for the decrease

Recession & economic slowdown after the burst of bubble in early 1990’s

Shift of plants from Japanto overseas countries( = “Globalisation” )

Increase of import of electric wire and cable

Technical innovation (miniaturisation & substitution)

※ 2 & 3 are the most important & primary reasons for decrease

① ②

③ ④

6

Trade of Cable of Japan

Export & Import of Insulated Wire & Cable of Japan

50

150

250

350

450

550

650

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Im port

Export

（Source：M O F）

(billion yen)

7

Main Trading Partners of Japan (2007)

Import608 billion yen

Export263 billion yen

Export & Import of insulated Wire & Cable of Japan

(Source : MOF)

O thers5.7%

U.S.A3.7%

Europe2.0%

Thailand5.5%

Indonesia7.3%

Philippine11.8%

Vietnam14.1%

C hina50.0%

HongKong9.5%

M alaysia4.3%

Philippine7.6%

Europe6.1%

C hina26.2%

U.S.A14.2%

O thers32.0%

8

Location of Overseas Japanese Cable Plants

China 91Thailand 27Malaysia 22Indonesia 21Hong Kong 14Vietnam 13Taiwan 12Philippines 12Others 15

(227)

Asia 227 (75% of total)

Europe 32North America 28Others 13

Total 300

Number of plants – July, 2007

(Source : JCMA)

9

Sales of Overseas of Japanese Nonferrous Materials Plants

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

97 98 99 00 01 02 03 04 05 06

0%

10%

20%

30%

40%

50%

60%

D om estic O ut-in O ut-out Export ratio(right scale) O ut-in ratio（right scale）

（H undred m illion）

( S ource : M ETI )

10

Japan Electric Cable Technology Center Inc.

・Location : HAMAMATSU, SHIZUOKA・Establishment : February 8, 1991・Employees : 32・Annual Budget : approx. 400 million yen・Site : approx. 13,000m2

・Membership : Regular members 71Supporting members 40

11

Mission of JECTEC

Supporting Environmental-friendly GlobalizationElectric Wires and Cable

① Research and Development② Certification Services③ Testing Services④ Education and Information Services

12

Amount of Copper for Power Transport Cables(From Power Plants to Customer’s Loads)

Type of Cable Overall Length Amount of Copper

(1)Power company

Power transmission

•ACSR (Aluminum)•Extra high voltage CV

90 thousand km 1.2 million tons

(Aluminum in copper equivalence)Power

distribution•High-voltage CV•OC, OW 1.3 million km

(2)Building/factory •Low-voltage CV-T 1.7 million km 3.5 million tons

(3)House •VVF 27 million km 1.5 million tons

Three times

JCMA focused its attention on low-voltage CV-T containing 3.5 million tons of copper, 3 times that of power transmission and distribution cables, and believed that such CV-T causes a great amount of electrical loss. An estimate has been conducted.

13

Loss Reduction by Increased Conductor Size of Low-Voltage CV-T <JCMA’s Estimate>

Increased conductor size

Insulant

CV-T 100㎟ CV-T 200㎟

Conductor

Sheath

Power Plant

Amount of generation971 billion kWh

(100%)

Loss in customer’s premises70 billion kWh

(7%)

If increased conductor size is completed (20 years later),Loss in customer premises will be halved

To 35 billion kWh (3.5%).

Customers

Increased size

Loss by transmission and distribution cables

68 billion kWh(7%)

Loads

(Building/factory)

This leads to 1% reduction in the total CO2 emissions in Japan.

14

Expected Effect by Increased Conductor Size(1) Economically advantageous to customers

An increase from 38mm2 to 100mm2, for example, results in a significant reduction in running costs (power charges resulting from 20 years’ electricity loss), despite an increased initial cost (cable costs). The sum of both leads to a minimum of life cycle cost at 100mm2.

(2) Significant CO2 emissions reduction1% reduction for all customers across the country

(3) Increase of copper demand0.2 million tons annually × 20 years = 4 million tons

Conductor size

Cos

t

Running cost

Life cycle cost

100 ㎟

Initial cost

38 ㎟

(Yen/m) CV-T 38mm2

CV-T 100mm2 (Balance )

(1) Initial cost 1,300 3,300 (2,000)

(2) Running cost (for year) 460 175 (285)

(3) Running cost (for 20 years) 9,200 3,500

(4) Life cycle cost ((1)+(3)) 10,500 6,800

(For information) Years of depreciation 2,000 divided by 285 = 7 years

〈JCMA & JECTEC got the Japan Copper Development Center Prize in 2008〉

15

Thank you

The Outlook for the copper and copper alloy industry in Japan- The Electrical Sector