Contractors Steer Clear of No-Name Cable Products

Media Release
24 February 2006

Contractors Steer Clear of No-Name Cable Products

New Zealand’s major cable manufacturer says most electricians are avoiding the temptation of cheap, unbranded cable products because of liability issues that could rest with the contractor if something goes wrong.

General Cable New Zealand says it is aware of some cable products such as TPS building wire being imported in relatively small volumes, such as a few pallets or a shipping container, for distribution through informal networks.

Ken Burden, General Manager (Wholesale), says while the practice is on a small scale there are real concerns in the industry about the use of products where the factory of origin is not identified and there is doubt about the level of compliance with standards.

“We have been aware of the availability of cheap imported cables for two or three years,” says Burden, “and while most seems to be channeled through small players and handyman projects, we have heard of a few cases where it has found its way onto building sites.

“It is possible that these types of plain-pack products are now quite widely available, which raises big questions about what happens if the product fails to perform and has to be removed.

“If a product from a reputable manufacturer were to fail, it is possible the contractor has some protection from liability. When it’s out of a plain box I doubt that the importer would be in a position to shoulder the risk and put the situation right.

“We have no problem with imported products per se, but it is important that contractors use products which are independently tested and offer a comprehensive warranty against defects or failure to comply with standards.”

Burden says demand for plain-pack cables is likely to be a response to the steady increase in copper prices, driven by strong international demand, especially from China, and pressure on suppliers of ore.

“If that’s the case, contractors need to consider the alternatives for ensuring their pricing is sustainable. In a volatile or steadily rising market the best way to achieve certainty in pricing is to avoid fixed-price contracts.

“We are aware of some contractors continuing to commit themselves to fixed prices through to the middle of 2007 and in a few cases for three years. By doing so, they risk their profitability being wiped out by material costs which are set by global commodity markets.”

Burden says General Cable has stepped in on several occasions to support its Wholesale customers, but can not do so indefinitely or underwrite the contractors’ risk when they continue to quote fixed price.

General Cable New Zealand says demand for energy and building cable products remains high. “Most of the demand relates to the pace of the building industry and consents being projected forward, but orders are also being driven by a renewed focus on quality, performance and compliance with appropriate standards.

“Our clients in New Zealand are telling us they want to have total confidence that the product supplied will perform reliably and that there will be consistency if further orders are placed.” General Cable’s quality processes include ISO 9001 accreditation for all operations and ISO 17025 for its laboratory.

Burden says electrical supply authorities, in particular, are alert to the risk of compatibility issues when cables are sourced from multiple suppliers. And he says concerns about the use of standards are not limited to cable products. “It’s inevitable that as trade agreements are liberalised there will be some interim issues relating to the application of international standards. We believe that the industry is, by and large, aware of the risks and able to weigh up the advantages and disadvantages of some of the cheaper products that are appearing.”

About General Cable

General Cable (NYSE: BGC), headquartered in Highland Heights, Kentucky, is a leader in the development, design, manufacture, marketing and distribution of copper, aluminium and fibre optic wire and cable products for the communications, energy and specialty markets. The Company offers competitive strengths in such areas as breadth of product line, brand recognition, distribution and logistics, sales and service and operating efficiency.

Communications wire and cable products transmit low-voltage signals for voice, data, video and control applications. Energy cables include low-, medium- and high-voltage power distribution and power transmission products. The Specialty segment is comprised of application-specific cables for uses such as electrical power generation (traditional fuels, alternative and renewable sources, and distributed generation), the oil, gas and petrochemical industries, mining, industrial automation, automotive, marine, military and aerospace applications, power applications in the telecommunications industry, and other key industrial segments. Visit our website at www.GeneralCable.com.

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