Order for Large-Scale DC XLPE Cable Project from a German Power Transmission Company
Acquisition of land cable manufacturer Südkabel
Sumitomo Electric has received an order from German electricity transmission system operator Amprion (headquarters: Dortmund) for the 525 kV high voltage direct current (HVDC) XLPE cable project, Korridor B V49, and has also signed a preferential negotiation contract for the supply of cables for a portion of Amprion's interconnector project, Rhein-Main-Link.
In connection with this agreement, to have a manufacturing site in Germany, Sumitomo Electric will acquire 90% of the shares of land cable manufacturer Südkabel GmbH (headquarters: Mannheim; hereafter “Südkabel”) and make it a subsidiary on October 1 of this year (planned date).
The total order value of Korridor B V49 and part of the Rhein-Main-Link exceeds €3 billion (approximately ¥500 billion). Cables for both of these large-scale projects are scheduled to be manufactured at Südkabel's factory. The signing ceremony for the order contract and share acquisition was held in Berlin on June 5.
In 2020, Sumitomo Electric received an order from Amprion for the world's first 525 kV HVDC XLPE cable project, A-Nord, which will connect Emden in northern Germany to Osterath (west of Düsseldorf), and has been outsourcing part of the cable manufacturing for this project to Südkabel.
The Korridor B V49 project will connect Wilhelmshaven and Hamm with a route length of approximately 300 km, while the Rhein-Main-Link project will have a route length of approximately 650 km. Both projects will transmit electricity from various offshore wind power sources in the North Sea to the main demand area in southern Germany and are scheduled for completion in 2033. All of the 525 kV HVDC XLPE cables used in these projects will be manufactured at Südkabel's Mannheim plant.
In response to this order, Sumitomo Electric has decided to invest approximately €90 million (approximately ¥15 billion) to increase production. Going forward, Sumitomo Electric will acquire 90% of Südkabel's shares from the Wilms Group, which currently holds 100% of the company's shares and then, with the Wilms Group, subscribe for additional capital increases in Südkabel (a total of €30 million, or approximately ¥5 billion) in accordance with the investment ratio. The acquisition is scheduled to be completed by October 1 of this year, subject to regulatory approvals.
By locally producing the HVDC XLPE cables necessary for Germany's energy transition, we will also contribute to the local economy and employment.
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