Eastern Cables to export electrical wires to China

Eastern Cables is set to export aluminium electrical wires worth $4.20 million to China, according to a company disclosure posted on the Dhaka Stock Exchange (DSE) website yesterday.

The listed state-run cable and conductor manufacturer has already signed an agreement with China National Technical Imp & Exp Corpo (CNTIC) in this regard, it said.

CNTIC, managed by China's central government and headquartered in Beijing, distributes energy as its core business, which covers the import and export of major technical equipment, contracting and managing domestic and overseas engineering projects, and so on.

Stocks of Eastern Cables soared 9.94 per cent to Tk 161.50 after the news broke on the DSE website.

The local wire maker's sales rose 17.6 per cent year-on-year to Tk 67.86 crore in financial year 2020-21 and all of the sales were in local markets, according to the company's latest annual report.

But despite the higher sales, it incurred a loss of Tk 12.19 crore that year while it was Tk 16.92 crore previously. Eastern Cables has been failing to get orders from local and international buyers and so, its sales plunged in the last few years.

These losses were compounded by the fact that the company had to increase the salaries and wages of its employees as per the government's national pay scale, as per the annual report.

In 2020-21, it sold 2,072 tonnes of cables and conductors instead of the targeted 4,500 tonnes, and the trend was the same in the previous year also.

In addition, the company is lagging behind in competition with private companies, it said.

In this situation, the export agreement gave a good impression to stock investors and so, the stock price rose, according to a stock market analyst.