‘It is not the most sexy industry’, admits Dietmar Steinbach, Global Segment Manager, Rolling Stock, at cable manufacturer Nexans, ‘but there are a lot of cables in the world.

As the world’s largest cable producer, Nexans has a 9% share of a highly fragmented market where the top 10 players account for only 20% of sales. It is one of the biggest users of copper, the Nürnberg plant alone getting through 6 400 tonnes a year as it produces enough cable to wrap around the Equator. The cables are destined for a vast range of applications, from heavily-protected undersea power lines to the kilometres of wires on a modern locomotive; in October Nexans won an order to supply Bombardier’s Kassel plant with power, control and data cables for 27 ALP-46A electric locos being built for NJ Transit.

Every centimetre the same

Because of the volatility of metal prices, companies such as Bombardier negotiate cable prices directly with Nexans, and harness makers are then asked to quote for working with those cables. Completed cable and connector assemblies arrive at Kassel pre-sorted into racks containing everything needed for a particular subsystem, cutting down the number of orders placed and deliveries accepted.

Responsibility for delivery lies with the supplier, as systems integrators move towards buying subsystems rather than components and their revenue comes from services and modernisation rather than new build.

‘To guarantee the quality of a cable is not so easy’, says Steinbach. ‘Every centimetre of a 10 km cable must have the same quality.’ Nexans might be pressed to beat Chinese manufacturers on the cost of the simplest cables, but can compete very successfully by reliably providing a consistent and high-performance product.

The cost of market entry is high, and there is still little prospect of harmonisation of standards. ‘We have to be local all over the world’, says Steinbach. European standards exist, but many countries impose their own additional requirements, and it is not yet possible to offer a single cable meeting every specification.

Fire safety is a particular concern for metros. A fatal fire at Düsseldorf airport in 1996 focused German attention on the need to avoid smoke, while the clean-up after a fire on the Stockholm metro showed the benefits of cables that do not produce acidic residue which damages equipment untouched by the flames.

In contrast, cables on Russian and North American freight locos are not required to meet the same fire standards. Instead, the focus is on performance and avoiding a fire rather than paying more for cables which perform well if the worst happens.

Secret formula

Like producers of Formula 1 tyres, cable manufacturers closely guard the secrets of their compounds. It is not just about stability, abrasion, smoke and toxicity, as cables must keep vital systems running in a disaster. Ease of stripping can make component assembly more reliable, while cold weather performance is important.

Relatively small volumes and budgets mean that technological developments in some areas of the rail supply industry are driven by research in the automotive and aviation sectors, but Nexans sees rail as an important field in its own right.

The Nexans laboratories at Nürnberg and Lyon have 80 experts, and the company spent €60m on R&D in 2007. Steinbach says that working across a range of markets gives access to a depth of knowledge which many competitors cannot offer. Nexans can supply every cable needed for a rail vehicle, enabling manufacturers to work with one supplier.

In 2005 Nexans opened a maritime and security cable plant at Waigaoqiao in Shanghai. Following a strategic decision to expand its capabilities, the first rolling stock power and control cables made at the plant were sent for quality verification a few weeks ago.

The business is wholly-owned, rather than a joint venture, ensuring Nexans can provide the Chinese market with the quality control and back-up it offers elsewhere. Most of the cost of a cable is in the raw materials, product development and quality control, with labour being such a small element that it is not worth shipping cables around the world unless they are for the most specialist applications.

The Chinese rail market is very important to Nexans, not only because of its size but also because the company expects it to withstand the economic downturn. ‘Local manufacturers will have such strong support from the home market that soon we will see them outside China’, Steinbach believes. ‘We have to be there, it is such a big market, and we have to be close to our customers.’