Prysmian says cable demand to grow 4% a year to 2009

Prysmian SpA, a telecommunications-and energy-cable business majority-owned by Goldman Sachs Group Inc., said demand for cables will keep rising in the next three years, buoying the price of copper.

Demand for power cables will grow 4 percent a year through 2009, Valerio Battista, chief executive officer of the Milan-based company, said today in a presentation at the First World Wire and Cable conference in Paris, organized by the London- based consulting company CRU. It grew at an average rate of 6 percent in volume terms in the past three years. He based the estimates on CRU data.

"Cable makers are seeing strong demand," Battista said during the presentation. "The turnaround in the economy is good everywhere, not only in Europe or Asia" and copper price gains pose no "significant" threats to usage in the cable industry.'

Copper has quadrupled since 2002, rising every year for the past five and trading at a record $8,800 a metric ton in May 2006. It was at $7,355 a ton on the London Metal Exchange today.

Copper accounts for about 50 percent of the cost of producing energy cables, according to CRU.

Shares of Prysmian have climbed almost 17 percent since Goldman Sachs sold shares in the company in a May 3 stock sale, cutting its stake by nearly half to 54 percent. The sale raised 1.03 billion euros ($1.7 billion). Goldman's private-equity unit bought Prysmian from Pirelli & C. SpA in 2005.

Prysmian has cash for acquisitions though the company isn't in talks with any likely targets currently, Battista said in a separate interview. "We're looking at fast-developing nations" such as Russia and India, where Prysmian has no production base, he said during the interview.

The company built a new plant in Brazil last year for so-called umbilical cables, used for offshore oil and petrochemical industries. It also owns China's Tianjin Angle Group Co. Ltd., which has annual sales of about 100 million euros.

Prysmian's spending on expansion will remain unchanged at about 90 million euros a year, Battista added.