Cable manufacturers’ turnover to crash 50pc this year
Cable manufacturers are fearing a 50 per cent year-on-year slash in revenue this year as demand for wires fell drastically in the country due to the coronavirus outbreak.
They also believe the financial losses would be long-term, as the pandemic has either suspended or postponed most of the development activities -- the main source of earning for the sector.
The industry lost Tk 23 crore in revenue every day during the countrywide closure for coronavirus, said Rafiqul Islam Rony, director for marketing and sales at BRB Cable Industries, the biggest cable manufacturer in Bangladesh.
The shutdown of infrastructure development and renovation activities had hurt the sector the most, said Kamruzzaman Kamal, director for marketing of Pran-RFL Group, which owns Bizli Cables.
There is no possibility of getting back the pre-coronavirus environment soon for the sector, where businesses have so far invested more than Tk 20,000 crore, said Rony of BRB, which holds 41 per cent share of the local market.
It will take at least two years for the cable industry to rebound, as it takes time for the demand to pick up, he said. In 2019, about Tk 7,000 crore worth of cables were sold, up from Tk 2,000 crore 11 years earlier, he said.
The sector has been growing at about 15-20 per cent on an average for the last 16 years thanks to the expansion of power grid lines as the government looks to ensure electricity for all by 2021.
The demand for cables increased in the country in the last five years, said Mohammed Abdul Jabbar, managing director of Eastern Cables.
Not only the gridlines, but the industry also has a big market in the housing and industrial sectors, he said.
"But the epidemic spoiled the growth momentum for an indefinite period."
The private sector's development activities have started on a limited scale, but the public ones are yet to resume, Kamal said.
There are 120 cable manufacturers in the market where Eastern holds 15 per cent share, BBS 13 per cent, Paradise, Partex and Bizli 6.5 per cent each, SQ 5.3 per cent and the others the rest.
The local players believe they would have thrived more had they gotten the big contracts of the Bangladesh Power Development Board and Rural Electrification Board.
"The project implementation agencies prefer Chinese companies because of their lower prices -- without any care for the quality of the product. Bangladeshi companies are now manufacturing world-class conductors and cables," Rony said.
The power plants also import foreign cables without paying any duty, although cables of that standard are available in Bangladesh, he added.
The cable manufacturers are dependent on raw materials imported from Chile, China, India, Oman, Malaysia, South Korea and Singapore.