Sumitomo to acquire German manufacturer to make cable for 2 orders worth €3 billion

Japan’s Sumitomo Electric announced that it will buy a controlling interest in Südkabel, and that it plans to expand production capacity at its plant in Mannheim, Germany, to manufacture 525 kV HVDC cable for two German net-zero projects worth an estimated €3 billion.

A press release said that Amprion, a German transmission system operator (TSO), needs the 525 kV HVDC cable for sections of the Korridor B and Rhein-Main-Link projects. Amprion signed a Preferred Supplier Agreement (PSA) for the two projects that will be finalized at a later date. Based on the PSA, Sumitomo has committed to providing the capacity, and to that end, it plans to invest in Südkabel. The deal allows Amprion to have its cable made in Germany.

The first order is for the HVDC cable for the approximately 300 km-long V49 link of the Korridor B direct current project between the Wilhelmshaven substations in Schleswig-Holstein and Hamm in North Rhine-Westphalia. The second order is for part of the Rhein-Main-Link, a 500-km energy route through an underground cable connection that will transport electricity from offshore wind farms in the North Sea to the Rhein-Main region.

Per the website of Südkabel, the company has had different names since it was originally founded in Mannheim in 1898 as Süddeutsche Kabelwerke (Südkabel). In 1970, the Kabel- und Lackdrahtfabriken GmbH (Kabel+Draht) was formed by merging several companies. Kabel+Draht was owned by Brown, Boveri & Cie. (BBC) for 18 years. With the formation of ABB AG through the merger of Asea and BBC, the name of the company was changed to ABB Kabel und Draht GmbH in 1988. In 1997, the power cable activities continued under the name ABB Energiekabel GmbH. On Jan. 1, 2004, Johann Erich Wilms acquired the cable and accessories plant with all its activities in Mannheim from ABB, and since then, the company has again operated under its traditional name of Südkabel GmbH. The company has approximately 260 employees.

The new projects will be ongoing over the next 10 years. Per its press release, Sumitomo Electric will have a 90% share of Südkabel, and will invest approximately €90 million to expand its production capacity in Mannheim to locally produce the highest end 525kV HVDC cable.

“With (the) acquisition of Südkabel, we can fully localize our operation in Germany to support Amprion and the energy transition in the country,” said Masaki Shirayama, CEO of Sumitomo’s Electric, Wire and Energy Unit. “Along with our new submarine cable factory being constructed in Scotland, we will further reinforce and expand our high voltage power cable capabilities in the region.”