Market Trends of Latin America Wire And Cable Industry
Power Cable Holds Major Market Share
- Power cables are used in power transmission and distribution networks to transport electricity over long distances from power plants to substations and industrial facilities, commercial buildings, and residential areas. These cables are designed to carry high-voltage electrical currents of more than 1,000 volts.
- Power cables find diverse applications, from subsea installations and onshore facilities to the construction sector. They play a crucial role in large-scale power transmission projects, powering construction machinery and providing temporary power distribution through generators or temporary substations. Beyond construction, these cables serve automotive, industrial, and residential needs.
- Also, increasing investment in grid modernization is expected to drive market growth. Many countries are upgrading and modernizing their electrical grids to enhance efficiency, reliability, and resilience. This involves replacing existing power cables with more advanced technologies, such as high-voltage direct current cables or superconducting cables, to accommodate higher power demands and improve grid stability.
- Leading the charge in Latin America's smart meter adoption are Mexico and Brazil. Brazilian utilities, including AES Eletropaulo, Celpa, Eletrobras, and Light, have progressed from pilot projects to extensive multimillion-meter deployments. Highlighting the momentum, state-run utility CFE aims to transition 30.2 million consumers to smart meters in Mexico by 2025. Emerging markets like Peru, Colombia, and Chile are also projected to show heightened demand for smart meters, further fueling market growth during the forecast period.
- According to 5G Americas, as of June 2023, 28 5G networks were deployed in Latin America and the Caribbean. Brazil and Chile accounted for four networks of this next-generation technology each. Mexico, Peru, and Puerto Rico followed with 3 5G network deployments each.
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Brazil to Hold Major Share
- Brazil is making substantial investments in its Wire & Cable market, driven by a surge in demand from the power generation and transmission sectors, particularly as power transmission networks undergo renewal.
- Rising electricity consumption is poised to drive the growth of the market under study. Câmara de Comercialização de Energia Elétrica (CCEE) (Brazil) forecasts that Brazil's electricity consumption will hit 519.4 TWh in 2023, marking a roughly 25% increase from the previous year. Looking ahead, Brazil's electricity consumption is set to keep climbing, with projections exceeding 590 terawatt-hours by 2027.
- Brazil has made significant advancements in renewable energy, with these sources now powering over 80% of the nation's electrical grid, a stark contrast to the 20% in the United States. Yet, the oil sector remains influential, contributing 3% to Brazil's GDP and showing signs of growth. In August 2024, President Lula unveiled the New Growth Acceleration Program (New PAC), emphasizing increased funding for environmental sustainability and a transition to a greener economy. Notably, the program also anticipates heightened investments in fossil fuels.
- Brazil is making substantial investments in its telecom sector, potentially driving up demand in the studied market. The Brazilian Software Association (ABES) highlights Brazil as the largest technology ecosystem in Latin America. Data from Equinix indicates that Information Technology (IT) investments in Latin America grew by 1.3% in recent years, with a projected upswing of 4-5% in the near future. Brazilian investments in the IT and telecom sectors are set to reach approximately USD 40-50 billion each. Such investments are poised to significantly bolster both the cloud computing and data center markets.
- As reported by GSMA, Brazil is on track to surpass 218 million smartphone connections by 2025. This surge in smartphone adoption is expected to drive a substantial demand for 5G network deployments. Leading the region, Brazil boasts 77% of the total 5G connections.
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