Home ›› 29 Mar 2022 ›› Front
Bangladesh’s cable market is expanding at a rate of 15-20 per cent a year, owing to nationwide electrification, substantial infrastructure development, and booming industries.
The size of the domestic cable market has grown from Tk2,000 crore to Tk12,000 crore over the past decade. More than 120 companies, including big brands, have pledged significant investments, resulting in the creation of approximately 50,000 employments in the sector.
BRB, BBS, Partex, Pran-RFL, SQ, Paradise, and Walton are just a few of the large industrial groups that have arisen centring the industry.
Despite the growing industry, the market size of Eastern Cables Limited (ECL), a loss-making subsidiary of Bangladesh Steel and Engineering Corporation, continues to decline.
The state-owned cable manufacturer last made a profit of about Tk 2.8 crore in FY 2016-17 and has been losing money ever since.
In FY 2017-18, the company suffered a loss of Tk 3.5 lakh, In FY 2019-20, the net loss of the company was Tk16.93 crore. And in FY2020-21, it incurred a loss of Tk12.2 crore.
According to ECL’s acting Managing Director Abul Kalam Azad, the company is falling behind the market competition owing to various complications including difficulties in selling to government bodies using the Direct Procurement Method (DPM), an increase in the purchase price due to the lengthy process in purchasing raw materials under the Public Procurement Rules (PPR), higher income tax deducted by different government entities, excessive reliance on bank loans, and increasing production costs because of growing overhead expenses.
In the first two quarters of the current fiscal year, ECL incurred a loss of over Tk 7 crore. At this time, the company sold 200 tonnes of electrical cables and conductors, when in the previous year it was 2,072 tonnes.
During the same period, the company’s output has also declined as it only managed to produce 161 tonnes of cables and conductors, when in the previous year it was 1,941 tonnes.
ECL MD Azad said: “We are trying to persuade government institutions to take orders from us via bilateral meetings.
I believe ECL can make a profit of over 50 crore in a single year if the electricity-related bodies under the Ministry of Power, Energy and Mineral Resources including PDB, BREB, DPDC, PGCB, DESCO, and NESCO, bought only 25% of their demand from us.”
BBS Cables, which has grown its manufacturing capacity and capacity utilization rate, was ECL’s main opponent in the market just a few years ago.
For product supply, BBS regularly inks agreements with various government entities such as BPDB and BREB. These contracts have a small but significant impact on the company’s revenue and profit.
Moreover, the company has launched special types of cables, “HT Cables up to 66KV capacity” and currently there is no such company in the country which is producing HT Cables up to 66 KV. DESCO and BPDB are the main targeted customers for this product as they increasingly use them in their distribution network expansion projects.
According to the Export Promotion Bureau, Bangladesh exported power cables worth Tk 8.18 crore last fiscal year. Canada, China, India, the Netherlands, Saudi Arabia, Singapore, and the United States were among the export destinations.
Eastern Cables Limited, often known as “Ecables,” was founded in Bangladesh in 1967. Its headquarters and manufacturing are at Patenga, Chittagong.
On March 1, 1971, it was put into commercial production. Currently, the company sells aluminium, control cable, HT 6KV and 11KV, Domestic (up to 750v), and usually 1rm to 1000rm Bare Conductor are now on the market.
