What the World, Needs Now... Is Cable
The world needs cable and wire, now and as far into the future as one can see.
For example, let’s look close to the Outstanding Investments thesis that focuses on the value of oil and natural gas. Just this market alone — oil and gas — uses about $4 billion per year of cable and wire. It’s a strong and growing market niche, with high — and profitable — specifications for safety and reliability.
Nuclear power is also a significant new source of demand for cable. There are currently 435 nuclear plants operating worldwide, with many more on the way over the next 20 years. Westinghouse-Toshiba forecasts 821 nuclear reactors worldwide by 2030. As a rule of thumb, each new plant uses about $10-12 million worth of cable and wire — all of it nuclear certified to exceedingly high specifications. So about 400 new plants means a $4-5 billion market just for the generation sites, let alone to hook these plants to the grid.
Meanwhile, in the growing wind power industry, there are significant new investments required for transmission cable and wires to connect the generating capacity to the grid. Solar power is also an embryonic market. According to the U.S. Department of Energy, the U.S. solar capacity by 2030 could be 150 times (no typo) the current level. And solar power requires four-five times the amount of cable and wire as wind power per megawatt of power. Then there are markets for communication systems. The backbone of global high-speed interconnectivity is submarine optical fiber cables.
In their own way, cable and wire are critical for human societies everywhere to function… no matter what the market does. So while it’s not an energy or resource play in the strict sense, I’m adding my favorite cable and wire company to the Outstanding Investments portfolio. It’s a world-class firm that manufactures wires for electrical transmission, as well as cables for communications and other specialty applications.
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