Striking the right Chord

Share on facebook
Share on twitter
Share on pinterest
Share on linkedin

As Bangladesh strives for the middle-income nation status by 2021, its drive towards industrialization is estimated to induce exponential growth in multiple industrial sectors throughout the nation. Industries closely linked with construction and infrastructural development are anticipated to benefit most from this goal set by the government. With increasing growth also comes the need for higher power consumption and the domestic cable industry is looking forward to catering the entirety of this expected demand locally. However, the question stands, how well-equipped is the local cable industry to meet up to such expectations and deliver regarding capacity, product safety, and quality?

The government aims to ensure electricity to the whole population by 2021 by generating 24,000MW of it and installing 12,000 circuit kilometers of the transmission line, the same report indicates.

Government Aims, Stimulating Growth
Power generation capacity in Bangladesh has increased from 5,245MW to 15,379MW in February 2017 of the fiscal year of 2005-06. According to the Bangladesh Economic Review (BER) 2017 published by the finance ministry, electricity transmission has also expanded to 10,376 circuit kilometers as of February this year. All these are part of the government’s plan to provide electricity to the entire population by 2021.
Progress has already been achieved, as only 10–15% of the population had access to electricity when local cable giant BRB began its journey in 1978. Now, 80% of the 16 crore population have access to power, including renewable energy, according to BER 2017. The government aims to ensure electricity to the whole population by 2021 by generating 24,000MW of it and installing 12,000 circuit kilometers of the transmission line, the same report indicates. Operators expect that this expansion will buoy the demand not only for power cables but also for domestic cables.

New Entrants Inducing Local Competition
While an accurate industry growth rate could not be determined, according to numerous industry executives, demand for cable in Bangladesh is growing up to 20-25% a year. Almost a decade ago, the market value was worth at BDT 1,500–2,000 crores when the country had about 5,000MW of electricity generation capacity. However, the increase in constructions and development of industries has facilitated growth, and the buoyancy of demand has raised the industry’s worth to Tk. 4,000–5,000 crores, which is only expected to expand further in the coming decade.
In the 1970s, a few firms, including state-run Eastern Cables Ltd, were engaged in cable manufacturing. Later, more manufacturers such as BRB Cable Industries Ltd and Paradise Cables Ltd (PCL) made their way into the cable industry to secure a slice of the growing market.
In recent years, more popular local industrial groups such as Partex Cables Ltd, a subsidiary of Partex Group hit the market. Among others, BBS Cables and RFL Electronics, a concern of PRAN-RFL Group, and entered the market in 2009 and 2012, respectively. Such increasing entry of local manufacturers has facilitated the industry to become self-sufficient and reduce import dependence, as industry experts say that almost all of the cable demand is now being met locally.
Currently, there are around 120 local cable manufacturers, serving the domestic demand. This amount is expected to grow further as still, only one-third of the population of Bangladesh lives in urban areas. According to World Urbanization Prospects 2014 released by the United Nations, the urban population has grown by 2.4% annually between 2010 and 2015. The UN also stated that the urban population is predicted to rise to a mammoth 11.24 crore by 2050 from 5.31 crore in 2014, and the high-rise buildings will replace today’s small buildings, while concrete houses will replace tin-shed dwellings. All these will require more significant capacity expansion in the domestic market, which is likely be fulfilled by more new entrants into this already growing industry in future.

Greatest Concern Over Safety
The cable sector has to rely heavily on the international market for raw materials, mainly copper and aluminum. Manufacturers also have to buy raw materials to make insulators. Due to lack of quality control and government level regulatory checks, it is often difficult to determine the quality of the raw materials and processes that go into forming these final products. We, as consumers, are very little aware of the devastating consequences a faulty cable can have. We are also barely aware of the quality of cable products that we use in everyday life.
The significance of certification by international cable certification bodies in ensuring the product quality of a cable manufacturer is often overlooked throughout the industry. The lack of interest in maintaining standards sets aside the fact that certification is a continuous process and not just a single-time approval. A certified company is required to follow a rigorous quality control system in its production line regularly in every single phase of the manufacturing process, starting from the source of raw material to production process. Besides, the post-production quality control mechanism and even the human resource management are needed to go through such measures.
When it comes to manufacturing different types of cable products, technical expertise varies from product to product. We can mention about power cable or industrial cable that requires a production technique and raw materials superior to that of domestic cables, something which is not always the case for Bangladesh. The issue lies in the lack of monitoring from the government side in this regard. Furthermore, a government agenda to set specific criteria as to who can produce what kind of cable products can solve the issue and ensure the safety of the end consumers.
It’s also noteworthy that due to the lack of regulation, many companies don’t pay much attention to ensure the quality of their products and try to keep their price margin low. It creates unfair competition in the cable market which ultimately affects the quality producers as this demands increased expenditure. However, a higher price is placed on the final consumers, as they end up prioritizing price over quality.
Most recorded short circuits and fire breakouts occur due to the lower quality of cables installed. In many cases, industries use domestic cables, which significantly risks the safety of the institution and its workers. Cable manufacturers urge that the government should take actions to control the use of domestic cable in factories. The industry owners should also be made aware of the severity of the issue and the risks involved. The cable industry and the government should both invest in creating mass awareness about cable-related safety issues.
Proposed Government Policies to standardize the industrywide regulation in the cable sector to ensure standardized quality is perhaps the most urged of all the issues that need to be solved by the industry leaders. Many cable manufacturers are indiscriminately using contaminated scrap copper as the primary raw material for cable production. Scrap copper comes from shipbreaking yards and is contaminated by solder, iron, aluminum, etc. As a result, their resistance property fails to meet the relevant international standards. The cables manufactured with these conductors get overheated above a particular load, and damage the insulation and cause short circuits often resulting in loss of lives and property.
Forbidding of domestic cables in industrial processes should be implemented as soon as possible to ensure employee safety. Other changes such as the government promoting the use of XLPE insulation instead of PVC insulation, which will provide safety as well as reduce carbon emission from cable products. For the conductors, increased use of aluminum cable instead of copper is also a recommended proposal, as it costs one-fourth of the price of copper and is of the same quality.
Owners also urge the government to rethink its current policy of requiring a minimum of five years’ manufacturing experience before entering the cable sector. The government should instead focus on the expertise of the industry, and if a company has all the necessary capacities, it should not be kept waiting for five years. According to operators, this will only discourage new entrepreneurs in the cable industry.
Finally, the cable industry is a ‘conversion industry’ in the sense that it only converts raw materials into cables. In such industries, raw materials are usually the most expensive parts, and in the cable industries, raw materials make up 60-70% of the total production cost. It is suggested that if the cable companies focus on enhancing efficiency in the supply of raw materials, they can maintain a right profit margin without compromising on quality. To ensure that, the government should play a significant role in defining the industry benchmarks for efficiency, which as a spillover effect can solve an array of issues at once.

Importance of Product Specifications and Quality
The quality of cable being used should be of paramount importance as homeowners, and industrialists bet crores worth of assets upon the safety that these cables have to provide. Apart from the safety hazards, low-quality cables cause substantial power loss in the long run. If impure raw materials are used for making conductors, a certain amount of power is bound to get lost during the distribution process due to higher resistance. And as generally, a cable remains in operation for 20-30 years, the total loss incurred, if counted over the years, stands at a very high amount. This is the one of less talked about sides of the perennial problem of system loss caused by the use of sub-standard products, as explained by the expert.
Moreover, the lack of knowledge of product specifications by consumers, as to which type of cable is appropriate for their desired purpose, also acts as a hindrance towards proper utilization and risk minimization.

Most recorded short circuits and fire breakouts occur due to the lower quality of cables installed. In many cases, industries use domestic cables, which significantly risks the safety of the institution and its workers.

A Brighter Future for the Industry Ahead
Opportunity in the cable industry also lies as the government is considering expansion of electricity coverage in rural areas, which will create a massive demand for power. The Power System Master Plan (PSMP) 2016 sets the target of generating 60,000 MW by 2041. To achieve this goal Bangladesh has to improve a lot in its power generation capacity. Similarly, it also has to improve power transmission and distribution capacity.
This is an opportune moment for the local cable industry to expand their business and focus on manufacturing distribution and transmission cables. High voltage transmission lines are required to meet the high power demand in the city areas, but overhead transmission of high voltage lines tends to be quite risky. Moreover, it also consumes valuable city space. Thus, the government is most likely to move towards underground transmissions. The government is planning to change all overhead electricity distribution lines to underground ones in six major cities by 2025 as per the PSMP. This is also expected to increase the longevity and reliability of the power distribution system. A considerable amount of cable will be required shortly to fulfill that demand.
The local companies who have the capacity should gradually expand towards producing 132 kV and 230 kV cables. The manufacturing of transmission cables requires high investment as 132 kV, and 230kV cables are far superior qualitatively compared to domestic cables. Achieving the capacity of producing such high voltage cables will result in overall production quality improvement, which is rewarding in the long run.
The export potential of cable products from Bangladesh is also something which should not be overlooked. Like many other industries, tax benefits provided by the government can benefit to promote cable export. In pursuit of that, the local cable industry should also strive to attain international standards to compete in the foreign market. If quality, capacity, and standardization can be achieved, then cable products can become premier export items for Bangladesh in the future.
Industry experts and leaders can anticipate a bright future of the cable industry in Bangladesh. Since the demand for electricity is growing along with the rapid development of the country, a massive scope of expansion lies subsequently for the cable industry in the coming years.


Share on facebook
Share on twitter
Share on pinterest
Share on linkedin
On Key

Related Posts

What’s New in Global Healthcare

These trends will overhaul the healthcare industry in 2020. While data sharing, 5G, supply chain & logistics, and AI will be big, consumer behaviour will

Home away from home

As the death tolls in Bangladesh keep on rising due to coronavirus, the deadly disease goes the extra mile to jeopardize the safety of animals