No profit for Eastern Tubes in a decade

Eastern Tubes Limited, a state-owned enterprise that produces lighting accessories, has been incurring losses for the past ten years while private companies manufacturing similar products are making money.

A subsidiary of the Bangladesh Steel and Engineering Corporation (BSEC) under the Ministry of Industries, the enterprise began commercial operation in August 1972 and continued to enjoy a monopoly status in the market of fluorescent tubes till 1992 when the market was opened to all.

In 2020, it announced setting up a plant to manufacture LED lights. Now the enterprise produces fluorescent tube lights, compact fluorescent lamps, LED bulbs, and LED tube lights.

The company continued making profits till 2010. It began incurring loss in the 2010 -2011 fiscal year and the amount was Tk 84.44 lakh and it rose to Tk 1 crore 21 lakh in the next fiscal year. The company saw the highest loss of Tk 4.05 crore in the 2019-20 fiscal year and in the the2021-22 fiscal year, the amount of loss was Tk 1.65 crore, shows data of the Ministry of Industries.

The Business Post approached the company’s managing director Engineer Md Nazmul Haque Pradhan to know the reasons behind the losses but he declined to make any comment.

The company’s deputy chief engineer and head of production department, Engineer Shamim Ahmed, however, attributed old machinery, liquidity shortage, and increased salaries and wages of the employees to the consecutive losses.

He said the company was a pioneer in fluorescent tubes but the demand for the product decreased after the emergence of LED products in the market. “We initially could not supply LED products as we had no LED plants. Now, we have a LED plant and we are going to recover the losses. Hopefully, we will make profits in the 2022-2023 fiscal year,” he said.

Shamim said now the company has focused on marketing for bulk sales of its products. “We are also emphasising product diversification to meet the market demand,” he added. In Bangladesh, lighting accessories now have a market of Tk 2,500 crore which is growing 10-15 per cent per year, according to the stakeholders.

Countrywide electrification and rising people’s purchasing power have contributed to the robust growth of the electrical products market in the country.