NKT is signing a joint venture agreement with cable company Walsin Lihwa to provide technical support for the construction of the first subsea power cable factory in Taiwan. The factory will produce high- and medium-voltage AC offshore power cables, mainly for the offshore wind market.
Aside from establishing a joint venture, the agreement also includes a service agreement for the construction of the factory and a technology license agreement licensing NKT technology to the joint venture. NKT will own a share of the joint venture and will act as the technical partner. The construction of the factory will not include CAPEX investments from NKT.
When the factory is in operation, expectedly in 2027, NKT will generate revenue based on a royalty scheme and dividend from the joint venture. Final constitution of the joint venture is subject to customary regulatory procedures.
“The joint venture is an attractive opportunity for NKT from a financial perspective and an opportunity for us to participate in a new, growing market, which is otherwise challenging to serve,” says NKT president and CEO Alexander Kara. “It is an important first step for NKT to establish presence in the Asian high- and medium-voltage market and a platform for future growth in the region.”
“Taiwan is blessed with an abundance of wind resources, presenting vast commercial opportunities in offshore wind power and submarine cable,” adds Yu-Lon Chiao, chairman of Walsin Lihwa. “Walsin is honored to enter into a win-win partnership with NKT, a world-class cable solutions provider with leading technology, to further our clean energy strategy and contribute towards Taiwan’s green energy future.”
Walsin Lihwa is an industrial conglomerate publicly listed in Taiwan. Wire and cable is one of its core business segments.