Cable market booms with electrification, infrastructural development

The cable market in Bangladesh is growing at an average pace of 20% per year, thanks to nationwide electrification coupled with massive infrastructural development and burgeoning industries, including SMEs and the housing sector.   

Industry insiders say the size of the domestic cable market has grown from Tk2,000 crore to Tk12,000 crore over the past one decade. More than 120 companies, including big brands, have come forward with hefty investments, creating over 50,000 jobs in the sector.

They, however, claim that local cable manufacturers have been exposed to an uneven competition because of the use of imported cables in government projects.

BRB Cable Industries Limited has been leading the cable market in the country for a long time. The company, which holds over 30% share of the local market producing all kinds of cables and cable adapters, employs more than 10,000 people directly.

Parvez Rahman, managing director of BRB Cable, said many entrepreneurs have made investment in the industry, buoyed by the pace of infrastructural development and electrification across the country. All the big companies have expanded their business.

Mentioning that the domestic cable market is growing fast, he, however, expressed his fear that local entrepreneurs will lag behind in capitalizing on the huge local demand if imports on easy terms continue.

"Foreign agencies that fund or supervise government projects [in Bangladesh] bring cables from their respective countries. On the other hand, we have to import raw materials from Chile, China, India, Oman, Malaysia, South Korea and Singapore by paying duty. As a result, we are falling behind in competition."

He also alleged that many a time low-quality cables are imported from abroad through false declarations.

BBS Cables is the second largest cable manufacturer in the country. The company that got listed on the stock exchange sold Tk647 crore worth of cables in the 2020-21 fiscal year. Besides, the second unit of BBS Cables – not listed on the bourses – had a turnover of Tk4,00 crore in the same year.

An official said BBS Cables, which has reached the milestone of Tk1,000 crore annual turnover within just 10 years, is on track for posting a 15% growth in revenue in the current fiscal as well. The company produces all kinds of cables.

Industry insiders say there are at least seven grades of electrical wire in the market. There are also differences in price.

They have expressed concerns over the fact that a huge amount of cables are brought in from abroad for different government projects, notwithstanding that local manufacturers are capable of meeting the entire domestic demand.

They have also alleged that low-quality products from India and China come to the market in various ways through false declarations or without declarations.

Besides, small factories built in different districts and upazilas of the country are producing low-quality non-branded cables, which also hold nearly 10% of the market share.

Md Anisur Rahman, president of the Bangladesh Electrical Cables Manufacturers Association, told The Business Standard, "In spite of innovative initiatives of domestic companies, imports and production of unauthorised electrical cables cannot be reduced. People also are buying cheap cables without checking their quality. In most cases, users cannot buy products as per the need because of some traders."

After BRB and BBS, Bizli Cables, a concern of Pran-RFL Group, is in a good position in the country's market. Within just four years of starting operations, the company has captured 5% share of the market. The market position of Paradise Cables is similar to that of Bizli Cables.

These companies also demanded that locally manufactured cables be used in government projects.

Kamruzzaman Kamal, director (marketing) of Pran-RFL Group, said, "We're maintaining an over 20% growth rate. But time has come to use local cables in government projects."

He urged the government to use locally-manufactured wires instead of foreign wires in mega projects of the government, including large power plants. "Then the companies will survive, and a huge sum of foreign exchanges could be saved."

Technological changes and new investments

The government announced the installation of underground cables in all cities to reduce the clutter of city cables.

Immediately after the announcement of the government, BBS Cables started a new factory at a cost of Tk150 crore to produce high-voltage marine cable. The factory named "Unit-2" started production in 2018.

BRB Cable also has started producing marine cables by setting up a new unit.

Domestic electric giant Walton Group is also coming to the market with this segment in recent times. The company aims to gradually produce all kinds of cables.

Sohel Rana, chief business officer (CBO) of Walton Electrical Appliance, "The demand for cable is increasing as a result of 100% nationwide electrification. Walton itself needs a huge amount of cables. So, the company is investing in this sector. We look to produce exportable cables soon."

Apart from Walton, Partex Group and Alco Group are set to make new investments in the industry.