News | June 6, 2024

Sumitomo Electric Makes Strategic Acquisition Of German Cable Manufacturer Südkabel To Deliver Two Major HVDC Cable Projects For Amprion

  • Sumitomo Electric announces the acquisition of majority shareholding in Südkabel, a renowned German high-voltage cable manufacturer, and the expansion of its production capacity in Mannheim, Germany, to locally manufacture the highest end 525 kV HVDC cables to support the German government’s net-zero initiatives.
  • German TSO Amprion has awarded two major HVDC cable projects, Korridor B V49 and part of the Rhein-Main-Link project, with a total project value of more than EUR 3 billion, to Sumitomo Electric as anchor projects to pave the way for a climate neutral energy system in the country.
  • Sumitomo Electric announced in May the construction of a high-voltage submarine cable factory in the UK. The new cable production facilities in the UK and Germany will make a significant contribution to the decarbonization of Europe.

Korridor B V49 and part of the Rhein-Main-Link project are large-scale projects, and the HVDC cable to be delivered will be manufactured at Südkabel. The signing ceremony for these HVDC projects took place in Berlin on June 5, 2024, along with the signing of a share purchase agreement to acquire 90% of Südkabel's shares from the Wilms Group.

Amprion and Sumitomo Electric are currently proceeding with the A-Nord HVDC project connecting a 300 km link between Emden and Osterath near Dusseldorf. The two additional projects will be implemented as part of a long-term strategic collaboration between the two companies.

Korridor B V49 will connect approximately 300 km between Wilhelmshaven and Hamm, and part of the Rhein Main Link project is approximately 650 km in length. Both projects will form part of Germany’s critical power transmission infrastructure, especially to bring renewable power generated in the North Sea to the country’s major consumer areas. They are expected to be completed by 2033.

The 525 kV HVDC cable for these new projects, which is the most technologically advanced transmission cable in the industry, will be manufactured in Südkabel’s factory in Mannheim. Sumitomo Electric has a long and solid track record of delivering HVDC cable projects on a global basis, including the 400 kV NEMO Link between the UK and Belgium, with its state-of-the-art cabling technologies, which will be implemented locally in Germany to support the country’s energy transition and employment.

In order to fully localize the production and construction of HVDC cable systems in Germany, Sumitomo Electric will acquire 90% of the shares of Südkabel, a reputable manufacturer with a number of remarkable track records through its more than 120 years of operation in Mannheim, to increase Südkabel's capital by EUR 30 million. Sumitomo Electric will also invest EUR 90 million to increase Südkabel's cable production capacity.

The acquisition process is currently expected to be completed as of October 1st this year, subject to regulatory approvals.

Masaki Shirayama, Managing Director of Sumitomo Electric, said “We are delighted to have been selected by Amprion as a cable partner for two major HVDC projects in addition to the A-Nord project currently under execution. With the acquisition of Südkabel, we can fully localize our business in Germany to support Amprion and the country’s energy transition. Along with our new submarine cable factory under construction in Scotland, we will further reinforce and expand our high-voltage power cable manufacturing capabilities in Europe.”

Dr. Hendrik Neumann, CTO of Amprion, said “The contract and the Preferred Supplier Agreement with Sumitomo Electric are crucial to enabling us to implement the Korridor B49 and Rhein-Main-Link projects on schedule and to our ability to play our part in achieving the nation’s climate goals. We are delighted to have found a partner in Sumitomo Electric that is building up extensive production capacities in Germany. This will generate value added in Germany and is also the most sustainable solution for implementing our projects thanks to the short transport routes.”

Michael Kellner, State Secretary of Federal Ministry for Economic Affairs and Climate Action, said “Power highways are an essential component for advancing the energy transition and the transformation of our economy. I am glad that Sumitomo’s investment will strengthen the production of high voltage direct current cables in Germany.

In view of the supportive policy environment put in place by the Federal Government, I do of course hope that this will be a long-term investment that will safeguard employment, economic growth and expertise in Mannheim.”

Rudi Hoogvliet, Plenipotentiary of the State of Baden-Württemberg to the Federal Government and State Secretary, said “Renewing and expanding our energy infrastructure is a central task in the coming years. The partnership between Sumitomo Electric and Amprion shows that the energy transition is an international endeavor and is also a key to new, green economic growth in Baden-Württemberg and beyond.”

Source: Amprion