TNAG-2478-FCO40-3608-Trade-relations-between-Hong-Kong--the-UK-and-other-countrie-1992 — Page 88

SELTA

UMPTON

CABLES

DELTA CROMPTON CABLES LIMITED

PACB/PG

25 February, 1992

MILLMARSH LANE

BRIMSDOWN

ENFIELD

MIDDLESEX EN3 7QD

TELEPHONE: 081-804 2468

TELEX: 22869

FAX: 081-443 2281

Mr. T. Eggar, MP, House of Commons, London, SWIA OAA.

Dear Tim,

It's some time since we last met at Enfield (Enfield Cables and Rolling Mills operation at Brimsdown) and when we saw you a couple of years ago I pointed out the dependence of the Brimsdown Power Cables operation on Hong Kong business. You were kind enough to advise on how to obtain UK citizenship for our ethnic Chinese manager in Hong Kong this is progressing satisfactorily.

The reason for writing is to make you aware that the viability of the Brimsdown cable operation is threatened by the likely loss of the largest Hong Kong contract which provides 40% of the load on the factory.

There are 208 staff and works directly involved in Brimsdown power cable manufacture, plus 46 on associated wire drawing and there would be a knock-on effect on the site support and Head Office staff. It is no exaggeration to say that our whole Brimsdown operation would have to be reviewed in the event that we lose the contract. We have power cable factories in Derby and Swansea; and our largest wire factory is at Llanelli.

The contract is for the supply of 11 kV power cable to China Light & Power in Hong Kong. This is a very successful power generation and electricity supply company which covers the New Territories and increasingly mainland China, Guanzong province. The cable is to British Standard and demand is very steady.

Prices were tight

We won the contract in 1988 from Hitachi Japan. and are held until September 1992 with only 2% inflation escalation allowed. We moved the plant making this cable from Derby to Brimsdown in 1989 to merge the manufacture of this cable-type and achieve economies of scale. The contract makes a small contribution to Brimsdown and company overheads. The remaining 60% load on Brimsdown is from UK demand for 11kV and 33kV cable which was profitable but is under savage margin pressure.

cont

REGISTERED IN ENGLAND NO.2307789 REGISTERED HEAD OFFICE

1 KINGSWAY LONDON WC2B 6XF

PART OF DELTA PLC.