Sumitomo Electric acquires Südkabel, bolstering Germany’s HVDC cable production for major renewable projects

Sumitomo Electric has announced a significant expansion in its operations by acquiring a majority stake in Südkabel, a well-established German high-voltage cable manufacturer. This strategic acquisition is set to enhance Sumitomo Electric’s production capabilities in Mannheim, Germany, specifically for the manufacturing of advanced 525 kV High Voltage Direct Current (HVDC) cables. These developments are in support of Germany’s ambitious net-zero initiatives and are aligned with Sumitomo Electric’s recent construction of a high-voltage submarine cable factory in the UK.

Strategic Implications of the Acquisition

The acquisition of Südkabel not only expands Sumitomo Electric’s manufacturing footprint but also positions the company to deliver on two significant HVDC cable projects awarded by German Transmission System Operator (TSO) Amprion. These projects, Korridor B V49 and a portion of the Rhein-Main-Link project, have a combined value exceeding EUR 3 billion and are pivotal to Germany’s transition to a climate-neutral energy system.

Sumitomo Electric’s acquisition of Südkabel and new HVDC projects are set to advance Germany’s renewable energy goals and enhance local economic growth.

Details of the HVDC Cable Projects

Korridor B V49 will extend approximately 300 km from Wilhelmshaven to Hamm, while the Rhein-Main-Link project spans about 650 km. These projects are crucial for transmitting renewable power from the North Sea to major consumption areas in Germany and are expected to be fully operational by 2033. The HVDC cables required for these projects will be manufactured at Südkabel’s expanded facility in Mannheim, utilizing the latest technological advancements in the industry.

Comments from Industry Leaders

Masaki Shirayama, Managing Director of Sumitomo Electric, expressed enthusiasm about the partnership with Amprion, stating, “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.”

Dr. Hendrik Neumann, CTO of Amprion, highlighted the strategic importance of the collaboration: “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.”

Economic and Environmental Benefits

The investment in local production is also expected to generate substantial economic benefits in Germany. Michael Kellner, State Secretary of the Federal Ministry for Economic Affairs and Climate Action, remarked on the broader economic impact: “I am glad that Sumitomo’s investment will strengthen the production of high voltage direct current cables in Germany.”

Rudi Hoogvliet, Plenipotentiary of the State of Baden-Württemberg to the Federal Government and State Secretary, emphasized the energy transition’s role in fostering economic growth: “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.”

This acquisition represents a strategic move by Sumitomo Electric to not only expand its operational capabilities but also to significantly contribute to Europe’s energy transition efforts. The localized production of HVDC cables is a key element in reducing logistical challenges and enhancing the sustainability of these large-scale infrastructure projects.