Cable maker bets on new products to turn around dwindling fortunes

Three-month copper sales on the London Metal Exchange gained as much as 0.9 per cent to $7,458.25 a tonne on Friday, the highest price since August 9, Bloomberg reported.

Growing global demand, especially in China, has seen copper prices fluctuate between $3,748 a tonne in March and $6,195 a tonne in July — a 40 per cent rise.

The price fluctuation has hit local manufacturers of electricity cables, with some of them unable to fully pass the higher costs on to their customers for fear of losing business.

Erode margins

“The high prices of course erode margins as it’s getting increasingly difficult to pass all the costs to the customer,” said Mr Mwangi.

It is also counting on its expanding reach across the recently launched East Africa Community Common Markets to grow market share.

The company currently operates in the five East Africa countries of Kenya, Uganda, Tanzania, Rwanda, and Burundi where telecommunication penetration is gaining ground.

EA Cables’ entry into the data marketing business follows concern over depressed sales to the Kenya Power and Lighting Company (KPLC) and Tanzania Electric Supply Company Limited (Tenesco) — its main consumers of electricity cables.

The two, the main buyers of electricity conductors across the east African region, have resorted to importing from low priced suppliers.