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Stable demand in the submarine cables business, like in mature markets for the high
voltage underground business. Positive trend for umbilicals confirmed in Brazil.
Market Overview
The submarine cable business faced an essentially stable
market in 2014 compared with the previous year. Demand for
offshore wind farm projects confirmed the stabilising trend
commencing late in 2013 (after the boom in 2011, 2012 and
part of 2013), the consequence of the high overall implemen-
tation costs of such projects and their subsequent transfer
to the end consumer. Once again in 2014, the market was
dominated by a few large global players who were awarded
almost all of the projects up for tender. The much more frag-
mented medium voltage segment of the market underwent
a slowdown, with every supplier exposed to the weakness in
the market for inter-array connections.
Demand in the high voltage underground business was es-
sentially stable in the mature markets of Europe and North
America. The imbalance between high production capacity
and limited demand continued to exert pressure on prices
in these markets. By contrast, demand continued to grow in
the Middle and Far East, where prices and profitability none-
theless remained well below those in mature markets due to
competition from local manufacturers and importers.
The SURF business reported a positive market trend for
umbilicals in Brazil, as well as a strong demand for flexible
pipes used in pre-salt fields, in which, however, the Group is
not yet present. By contrast, there was limited demand for
the post-salt products in which Prysmian competes. The
Downhole Technology product segment enjoyed a positive
market trend, thanks to growth in demand by global operators
for projects in both the United States and other geographical
areas, such as Central and South America, Europe, Far East
and Middle East.
In addition, Prysmian Group engineers, produces and installs
"turnkey" submarine cable systems for power transmission
and distribution. The products offered include cables with
different types of insulation (cables insulated with layers of
oil or fluid-impregnated paper for AC and DC transmission
up to 500 kV; cables insulated with extruded polymer for AC
transmission up to 400 kV and DC transmission up to 300 kV).
The Group offers specific technological solutions for power
transmission and distribution in underwater environments,
which also satisfy the strictest international standards.
The range of products for the offshore oil industry includes not
only submarine cables to link offshore platforms to mainland
power grids but also solutions for use in the extraction and
storage of hydrocarbons. The wide portfolio includes all the
SURF (Subsea Umbilical, Riser and Flowline) products and
services: multifunction umbilicals for transmitting energy and
telecommunications and for hydraulic powering of wellheads
by offshore platforms and/or by FPSOs (Floating, Production,
Storage and Offloading vessels); high-tech flexible pipes for
oil extraction; special DHT (Downhole Technology) solutions,
which include cables encased in insulated tubing to control
and power systems inside extraction machinery below the
seabed's surface and for the flow of hydraulic power fluids to
such machinery.