Asia Pacific Wire & Cable Corporation Stock

Asia Pacific Wire & Cable Corporation Limited (APWC) engages in the manufacture and distribution of enameled wire, power cable, and telecommunications products in Thailand, Singapore, Australia, the PRC (the People's Republic of China), Hong Kong and certain other markets in the Asia Pacific region. The company is a subsidiary of Pacific Electric Wire & Cable Co., Ltd. (PEWC).

The company also provides project engineering services in supply, delivery and installation of power cable (SDI). The company's major customers include appliance component manufacturers, electrical contracting firms, state owned entities, wire and cable dealers and factories. The company operates its business through operating subsidiaries.

The company's power cable and telecommunications cable products are primarily sold in the domestic markets of the countries where they are manufactured, whereas a portion of the enameled wires manufactured by the company in Thailand are exported, primarily to customers throughout Southeast Asia.

Segments

The company operates through three segments: Thailand, North Asia, and Rest of World.

In Thailand, APWC has the following subsidiaries:

Charoong Thai Wire & Cable Public Co. Ltd. (Charoong Thai), a public company listed in Thailand that is majority owned by APWC.

Charoong Thai owns three principal subsidiaries in Thailand, namely Siam Pacific Electric Wire & Cable Co. Ltd. (Siam Pacific), Double D Cable Co. Ltd., and Siam Fiber Optics Co. Ltd.

The company produces and sells enameled wires, power cables, and telecommunication cables in Thailand. Charoong Thai is one of the leading cable manufacturers in Thailand. Its distribution channels include both direct sales to state owned entities and private sector participants in the infrastructure sector, and sales to agents for state owned entities. Sales within the Thailand region are made directly by the sales department of the APWC operating subsidiaries in accordance with terms and pricing set by the local subsidiaries. The major customers of the company include clients working with the government and its contractors.

In North Asia, APWC has four principal subsidiaries:

Crown Century Holdings Ltd. (Crown Century), which is a registered Hong Kong company majority owned by APWC.

Shanghai Yayang Electric Co., Ltd. (Shanghai Yayang), a PRC company that is majority owned by Charoong Thai.

Pacific Electric Wire and Cable (Shenzhen) Co. Ltd. (PEWSC), a PRC company wholly owned by Crown Century.

Ningbo Pacific Cable Co., Ltd. (Ningbo, collectively with PEWSC and Shanghai Yayang, the PRC Subsidiaries), a PRC company wholly owned by Crown Century.

The company produces and sells enameled wires in China. The company sells enameled wires directly to manufacturers of electric motors for use in various consumer appliances. PEWSC manufactures enameled wires for electric, video and audio products for the South China market. Shanghai Yayang, which had previously produced enameled wires, ceased production at the end of October of 2019 and has been restructured as a trading company in Shanghai that supplies mainly transformer, motor and coil manufacturers in the eastern part of China. Ningbo is a dormant entity. The company continues to indirectly own the equity of Ningbo, which still holds its government-granted business license. The company has disposed of all of the buildings and most of the equipment and the land use rights for the property where Ningbo's operations had been situated. The principal machinery utilized at the Ningbo facility has either been sold or stored at other operating facilities of the company.

In the Rest of World (ROW), APWC has three principal subsidiaries:

Sigma Cable Company Pte. Ltd. (Sigma Cable), a Singapore entity that is majority owned by APWC.

Epan Industries Pte. Ltd., a Singapore company that is wholly owned by Sigma Cable.

Australia Pacific Electric Cable Pty. Ltd. (APEC), an Australian company majority owned by APWC through its ownership in Crown Century and Sigma Cable.

The company produces and sells low voltage power cables in Singapore and Australia. In addition, the company sells a wide range of wire and cable products produced by third party suppliers in addition to PEWC. The company offers SDI project engineering services for medium and high voltage power cables to power transmission projects in Singapore. SP Power Assets Ltd. has historically been the principal customer for the company's SDI services, accounting for nearly all of its supply, delivery and installation (SDI) sales. Sales to SP Power Assets Ltd. are under a comprehensive contract, with purchase orders placed from time to time.

In addition to these principal subsidiaries in its reportable segments, the company established Asia Pacific New Energy Co. Ltd. (APNEC), a Taiwanese company, in Taipei City on October 26, 2018, for a new renewable energy business. APNEC seeks to develop an alternative energy business in Taiwan by availing itself of incentives provided by the Taiwan energy authority for the expansion of 'green' energy alternatives.

Products are marketed under the respective names of the operating subsidiaries in each geography. For instance, products manufactured by Siam Pacific are marketed under the 'Siam Pacific' trade name. Products manufactured by Sigma Cable are sold under the 'Sigma Cable' brand.

Products and Services

Across its three reporting segments, the company manufactures and sells a wide variety of wire and cable products in primarily three general categories: enameled wire, power cable, and telecommunications cable. The company's enameled wires are used in the manufacturing of components and sub-components of a number of household appliances and small machinery. The company's telecommunications and power cables are used in a range of infrastructure projects and in commercial and residential developments. In addition, the company acts as a distributor in Singapore of wire and cable products manufactured by PEWC. The company also offers SDI project engineering services of medium and high voltage cables for power transmission projects in Singapore.

Products

Copper rod is the base component for most of the company's products. The manufacturing processes for these products require that the rod be 'drawn' and insulated. In the 'drawing' process, copper rod is drawn through a series of dies to reduce the copper to a specific diameter. For certain applications, the drawn copper conductor is then plated with tin. Copper used in cables is covered with various insulating materials that are applied in an extrusion process. The insulated wires are then combined, or 'cabled' to produce the desired electrical properties and transmission capabilities. Then, depending upon the cable, some form of protective cover is placed over the cabled wires.

Enameled Wire

The company produces several varieties of enameled wires. Enameled wires are copper wires varnished, in an enameling process, by insulating materials. The enameling process makes the wires more resistant to oil, heat, friction and fusion, and therefore suitable for use in machinery and components and sub-components of manufactured goods. The company manufactures enameled wires in sizes that range from 0.02 mm to 4.00 mm in diameter, varnished by various types of petroleum insulation materials, including polyvinyl formal, polyurethane wires and polyester. Enameled wire products are used in the assembly of a wide range of electrical products, including oil-filled transformers, refrigerator motors, telephones, radios, televisions, fan motors, air conditioner compressors and other electric appliances.

Power Cable

The company also produces a range of armored and unarmored low voltage power transmission cables. Low voltage power cables, generally considered to be cable with a capacity of 1 to 3.3 kilovolts, are typically used to transmit electricity to and within commercial and residential buildings, as well as to outdoor installations, such as street lights, traffic signals and other signs. Armored low-voltage power cables are usually used for public lighting and power transmission running to buildings and installed either above or below ground. Unarmored low voltage cables are mainly used as lighting and power supply cables inside and outside of buildings. The voltage capacity of the company's power cables ranges from 300 volts to 1 kilovolt.

Production of unarmored cables begins by drawing and annealing of copper rods. The drawn copper wires are then stranded or 'bunched' into round or sector-shaped conductors in sizes ranging from 1.5 square millimeters to 1000 square millimeters. The copper conductors are then covered in an extrusion process with a plastic insulator, such as polyvinyl chloride (PVC), after which 2-5 conductors are twisted into a circular cable core in a cabling process and covered by a plastic outer cover.

Unarmored cables are composed of one or more cores of copper wire, insulated by substances, such as PVC. Armored cables are produced in the same manner and the same range of configurations as unarmored cables, but with the addition of an outer layer of galvanized steel or iron wires to protect the cables from damage.

Telecommunications Cable

The company produces a wide range of bundled telecommunications cables for telephone and data transmissions with different capacities and insulations designed for use in various internal and external environments. The principal use of these cables is as access cables to connect buildings and residents to trunk cables. Telecommunications cables produced by the company include copper-based and fiber optic cables.

Production of copper-based telecommunications cables begins by drawing a copper rod until it has reached the desired diameter, after which the drawn wires are subjected to a process called 'annealing' in which the wires are heated in order to make the wires softer and more pliable. Utilizing an extrusion process, which involves the feeding, melting and pumping of a compound through a die to shape it in final form as it is applied to insulate the wire, the wires are then covered by a polyethylene (PE) or polyvinyl chloride (PVC) compound and foam skin, suitable for different installations and environmental conditions. In order to reduce the cross-talk between pairs of communication wires, the insulated wires are then 'twinned' or twisted so that two insulated single wires are combined to create a color-coded twisted pair. The twisted pairs of wires are then 'cabled' or 'stranded' into units of 25 twisted pairs for combination with other 25 pair units to form cable of various widths and capacities. The appropriate number of units is cabled together after stranding to form a round cables core. Depending upon the planned environment, a petroleum jelly compound may then be added to fill the cable core to seal out moisture and water vapor. Aluminum or copper tape is used to 'shield' the cables and, finally, the shielded cable core is covered by plastic outer sheathing. The company manufactures telecommunications cables with capacities and sizes ranging from 25 to 3,000 pairs of 0.4 mm-diameter wires to 10 to 600 pairs of 0.9 mm-diameter wires.

Services

Fabrication

The company performs fabrication services for its customers, converting raw materials to wire and cable products. Raw materials, such as copper, aluminum, PVC, polyethylene (PE) and optic fibers, are commodities traded on global markets with anticipated price fluctuations and currency risk. Given these risks, the company provides fabrication services using customer-owned materials in order to limit exposure to these risks.

SDI Project Engineering Services

The company's SDI project engineering involves supply, delivery and installation of primarily medium and high voltage cables to power transmission projects in Singapore. In entering into a contract to supply, deliver and install cables for a power transmission project, the company delivers medium and high voltage cables and enters into subcontracting agreements with local companies to install the cables as required by the project.

Suppliers

The company's key suppliers include PT. Karya Sumiden Indonesia - Indonesia, Walsin Lihwa Corporation - Taiwan, Mitsubishi Corporation RTM International Pte.- Singapore, Glencore International AG.-Switzerland, and Marubeni Corporation-Japan.

Competition

In addition to APEC, there are two major wire and cable producers with operations in Australia: Olex Cables (owned by Nexans) and Prysmian Cables, with factories in the states of Victoria and New South Wales, respectively. A significant portion of Australian market is serviced by two importers, such as Electra Cables which reportedly imports cables from China factories; and World Wire Cables, which reportedly also sources cables from its Chinese partners to sell in the Australian market. These companies are APEC's principal competitors.

History

Asia Pacific Wire & Cable Corporation Limited was founded in 1996. The company was incorporated in 1996 as a Bermuda exempted company limited by shares and incorporated under the Bermuda Companies Act 1981, as amended.