Home ›› 16 Apr 2022 ›› Opinion
Bangladesh's electrical cable manufacturing industry has come a long way in the last two decades. Now, most parts of our country have access to electricity, which has created the ideal situation for the Bangladeshi electrical cable or wire industry to blossom. Not that long ago, we were completely import-dependent on this particular product. Still, in recent years that scenario has dramatically changed. Today we are witnessing a 15 to 20 per cent growth in this sector every year. Despite the pandemic, our demand for locally manufactured electrical cable was never put on hold. Thanks to the mega projects and continuous structural developments taking place throughout the country. We are currently looking at a fiscal 100 billion to 120 billion taka electric cable market and studies indicating a sharp rise in this sector in the coming years.
The leading local power cable manufacturers enjoy good business as the local demand only increases with time. After meeting the local demand, some leading electrical wire manufacturers are now exporting to other countries. Two Bangladeshi companies are exporting now, and these two companies are BRB Cable Industries Ltd and RR-Imperial Electricals. They have become role models for other local power cable manufacturers. Many are shifting their gaze to the export market. China, Japan, South Korea, Singapore, and Malaysia are the major power cable exporting countries. According to the internet, the global power cable market size was valued at USD 143.01 billion in 2020 and is projected to reach USD 262.54 billion by the year 2030, registering a CAGR of 6.5 per cent. Looking at such a figure is more than good enough to motivate the local electrical cable manufacturers to set more export-oriented goals.
As per industry insiders, it costs around 4 to 5 billion taka to start a modern electrical cable industry. Starting electrical cable manufacturing is easy for big businesses as they do not require a huge investment. The essential expertise in engineers and labor is very much available in our country. One does not have to worry about the raw material or RM used in this industry. Many big electrical cable manufacturers, especially those with shipping lines of their own, can import the necessary RM in bulk and offer it to other manufacturers. Bangladesh's small or local electrical cable manufacturers import RM from Chile, China, India, Oman, Malaysia, South Korea, and Singapore.
Several factors are inspiring new companies to enter this industry. Some of them have the opportunity to sell products in the international world and get tax benefits from the government. Many companies already have set up their factories in different export processing zones to accrue the tax and vat benefits. Such factors attract both local and international conglomerates to invest in this sector. They are building state-of-the-art factories that are more technologically advanced; thus, they are working to produce superior quality products. One of the most interesting facts about the raw material regarding this industry is that the primary raw materials needed in this industry are brought from the international market. Therefore, the crude price of copper material and aluminium is the same for us and our neighbouring countries. One can check The London Metal and Shanghai Metal Market and get an idea about the international market price concerning the RM of the electrical cable industry. Rubber and plastic-based ingredients such as PVC grains are now manufactured in our country. The raw material, especially the PVC Masterbatch, is being manufactured in Bangladesh. According to BECMA (Bangladesh Electric Cable Manufacturing Association), there are 200 cable manufacturers in Bangladesh, 10 of them are leading big companies manufacturing top-quality cables. There are 60-70 medium-sized companies manufacturing medium-quality cables. In different media reports, they also claimed that more than 100 small manufacturers directly and indirectly employ nearly four lakh people. Bangladesh usually imports some high-frequency power cables used in bridges and industries. Companies like BRB, Poly, SQ Wire and Cable, and Bizli manufacture high-voltage power cables for industrial use.
Although this industry has enormous export potential, it is not that easy to start that process. There are issues like quality control, and having certification from different world-renowned standard testing organisations. Certifications such as ISO, REACH, and RoHS are common standards in this industry. Again, to export to US and EU countries, one must have a different range of certifications and obtain the VDE and UL certificates. It should be mentioned that BSTI is the authority concerned to check and monitor the quality of the electrical cables manufactured and sold in the market. Without their permission, the manufactured electrical cables cannot be sold. However, there are grave concerns among the experts involved in this industry as to how much quality is being ensured by BSTI. One might not give that much attention, but faulty cables can be and are one of the leading reasons behind buildings catching fire. We often come across news that a fire broke out and a defective cable was the prime reason behind it.
Nonetheless, we hardly see any further investigation to bring the faulty power cable manufacturers under any form of justice. We only come across news of a few raids in areas like Nawabpur and old Dhaka. However, we see illicit power cable manufacturers going back to production as soon as the law enforcement agencies leave. Several accounts have shown shop owners or dealers selling unbranded and poor-quality power cable using other brands' packaging. The authorities concerned, in this case, the law enforcement agencies near the market and the quality assurance bodies must ensure that quality power cables are sold in the market.
Although when most of the leading power wire manufactures are doing extremely well, the news of Eastern Cables Limited (ECL) continuing to lose market share is rather frustrating. In this newspaper, it was reported that 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. According to ECL's acting Managing Director Abul Kalam Azad, the company is falling behind the market competition owing to various complications. These include 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. This is not the first time we have seen a national or government-owned industry losing its market share. We see such government-run manufacturing units shutting down one after another. We sincerely hope that the authorities concerned will find solutions to revive such industries. The best way to tackle this situation is to introduce new and advanced production machines and a workforce consisting of more proactive people managing from sales to the procurement of RM in such sectors. The government can even introduce policies where a certain portion of the government's requirement of such products has to be brought from government-run factories.
The writer is a journalist. He can be contacted at aizanbaba@yahoo.com
