Business

Cable makers can meet 90% demand


LAHORE:

Stakeholders of the power cable industry have said that the sector has ample potential to emerge as a mainstream pillar of the country’s economy, however, it requires a level playing field and stable demand from the public and private sectors.

Newage Cables Director Amer Bakht Azam said that the industry had the capacity to fulfill nearly 90% of the cable needs of the country through local manufacturing.

However, he lamented that $90 million of finished goods, related to this category, were imported every year due to concession in import duties.

“It is a win-win situation for those who are importing cables and at the same time it is discouraging for the local investors who are producing quality products,” said Azam while talking to The Express Tribune.

Azam highlighted that the industry was expanding 15-20% annually, adding that consistent demand from public sector companies could further accelerate the growth.

He pointed out that the Water and Power Development Authority (Wapda) was the largest buyer of 132kv and 500kv power cables and no other local company came close to it in terms of cable demand.

“Globally, the industry caters to the large segments other than the government departments but in Pakistan, opposite is the case,” he said.

The director stated that the China-Pakistan Economic Corridor (CPEC) was a ray of hope for the sector but unfortunately local cables were not used in any of the key infrastructure projects under the flagship scheme.

“Due to taxes, our products become 20% costlier than the imported cables, which turn them uncompetitive in the local market and we are unable to sell our merchandise on a large scale,” he lamented.

The cable industry of Pakistan consists of more than 400 manufacturers and a majority of them owns small and medium-scale units.

There are only three major cable manufacturers who jointly enjoy 60-70% of the market share while the rest is held by the remaining firms.

Azam estimated the total value of the cable industry at Rs60 billion, which provided employment to around 15,000 people.

“Had local stakeholders been involved in CPEC projects, it would have further boosted the growth and size of this industry,” he said.

Nevertheless, local companies are not disappointed as they see light at the end of the tunnel.

Government’s policy of steering industrialisation by offering low-interest loans had spurred growth in different sectors of the economy and the industry expected a considerable progress in the next two to three years, he said.

Economic conditions are now improving and industrial demand is widening.

“The government is taking right initiatives by slashing import duties and similar taxes on raw material, which were as high as 65%”, Azam said.

Demand for exportable merchandise is also on the rise because many countries, including China, are following strict standard operating procedures amid Covid-19 which has unlocked new opportunities for Pakistani companies.

He revealed that his company was shipping products to Afghanistan and Qatar for their mass transit projects.

Local demand is rising as well and it is expected to enhance competition among manufacturers and push them to market their brands.

He was of the view that advertising would steer the recognition of cables as the locals would start shifting towards quality cables in Pakistan.

Published in The Express Tribune, July 15th, 2021.

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