Mass electrification boosted the electrical goods industry

From massive electrification in rural areas to booming urbanization, increasing people’s purchasing power and government tax incentives, all these have increased the market for household electrical products fivefold in only a decade.

Industry insiders say that starting from scratch, the market size has now crossed the Tk 7,000 crore per year mark.

The electrical products sector has also reduced its dependence on imports to a large extent and generated a lot of jobs by attracting investments to the tune of Tk 5,000 crore so far, they add.

Tax relief for new investments was another incentive to propel local manufacturing of electrical products.

Mainul Islam Bhuiya, chairman of the Bangladesh Electrical Merchandise and Manufacturers’ Association, told The Business Standard that many companies, such as Walton, RFL, Energypac, ACI, BD Lamps, Mohammadi Electric, Super Star, BRB, BBS, Partex , Paradise, and MyOne, intensified in the manufacture of electrical products. More than 2,500 small entrepreneurs have also ventured there.

Branded businesses now meet 50% of local demand, while unbranded products – local and imported – meet the rest, he said.

Nationwide electrification and increase in people’s purchasing power has massively contributed to the growth of the market for electrical products including fans, lamps, switches, circuit breakers, cables and connectors. generators, noted Mainul Islam.

Bangladesh’s power generation capacity has nearly quintupled to 24,000 megawatts since 2010-2011. Almost 100% of the population now has access to electricity and the number of beneficiaries has reached 4.64 crores with a threefold increase in a decade, according to the Power Division.

On the other hand, per capita income fell from $750 to $2,500.

Electrical products sold by 60,000 retailers

For the sale of electrical products, around 60,000 retail stores have also sprung up across the country, Mainul said, adding that from production to marketing, 4 to 5 lakh jobs have been created.

Kamruzzman Kamal, Director of Marketing at Pran-RFL Group – the market leader with an 18% market share – mentioned that luxury, which now adds to the essential use of electrical products, and a massive increase in The demand for these products across different industries have fueled the growth in the industry.

RFL launched the electrical products business in 2012, taking advantage of the increased availability of electricity.

Starting with ceiling fans, the company now manufactures over 1,200 types of products, such as fans, lights, switches, outlets, circuit breakers, cables and batteries.

“The electrical products of our brands, such as Bizli, Click, Blaze, are of higher quality than many foreign brands. Our annual growth is more than 20% and we expect such growth to continue for at least the next five years. “, he noted.

“We have not been impacted by Covid-19 as demand for electrical products has not declined as construction continues, even during lockdown.”

Kamruzzaman also said they employ around 4,000 people in production and marketing.

Sohel Rana, head of business operations at Walton Electronics, said the government had granted a 10-year tax holiday to power companies. Duties on imports of raw materials have also been reduced, resulting in a gradual growth of the market.

Beginning its journey in 2016, Walton Hi-Tech Industry now manufactures more than 1,000 kinds of products, such as different kinds of switches, circuit breakers, DB boxes, fan hook boxes, brackets and ceiling roses, electrical pipes and fittings. UPVC, and hardware and accessories.

Stating that the company has created at least 5,000 jobs, Sohel said: “Our goal now is to gain a foothold globally. Last month we visited the African market where we saw great potential for our products. Bhutan is also up for grabs.

Another big player, Energypac, which now manufactures 500 types of electrical products with a 5-6% market share, has seen massive expansion over the past decade.

Nurul Aktar, CEO and Director of Energypac Electronics Ltd, said they are gradually expanding into producing all types of electrical products. “We are now exporting our products to India and we also have a great opportunity to enter different countries including African countries.”

Humayun Rashid, director of Energypac, said the company had made an investment of Tk 1,200 crore and employed 4,700 people.

Over the past four decades or so, Mohammadi Electric has become one of the major players in the market with its annual turnover reaching Tk 430 crore – nearly 8% of the domestic market with a range of some 1,600 items.

Mohammadi Electric now has two large manufacturing units, producing the most essential electrical products, such as ceiling fans, all kinds of lights, cables, switches, sockets, etc.

In addition, BRB and BBS each hold at least 4% market share.

Unbranded products occupy 50% of the market

Local and imported unbranded products captured 50% of the electricity market.

Around 5,000 retail stores have sprung up in Nawabpur, the country’s largest electricity market. They sell all types of electrical products, but most are unbranded.

Marketplace companies say they sell products collected from small entrepreneurs, as branded ones cost much more.

Saifuddin Johny, owner of Taj Electric, said, “We can buy a dozen sockets produced in a small factory for 50-80 Tk, but the same amount from a big brand costs 150-200 Tk. So we prefer to sell unbranded products. .”

Merchants said they also sell products from several thousand smaller brands, such as Sunplus, Winer Deluxe, Superstore, Osaka, Tisha, Sunlight, Hosaf, Toshiba, BRB, Paradise, BBS, Sohana, City, Falcon, Transtec, PHB, Smart, Padma, MK, Grameen, Anik and RK.

Kamruzzman Kamal, Marketing Director of Pran-RFL Group, said that as a safety factor associated with electrical products, quality and safety are more important than price. But some importers supply poor quality products to markets at low prices. Moreover, the market has been flooded with counterfeit products. The government should pay attention to this.

Major brands believe it is important to ensure the quality of electrical products, saying that if the quality of these products is poor, there is a risk of electrical accidents.

Dr. Md Kamrul Hasan, head of the electrical and electronic engineering department at Buet, said a company, whether small or large, should have technicians to produce electrical products. There should be a regulatory body to ensure that all products are of good quality before they are marketed.

More than 2,500 new entrepreneurs join the industry

After graduating in 2014, Mubarak Hossain from Nawabganj started an electrical products business on the advice of a friend.

He used to buy goods imported from China by various importers and resell them in his shop named “Maa Electric”.

Later, he himself had started importing after obtaining a license in 2015. Besides, he would sell products from local manufacturers. In 2017, he launched into production by importing three machines.

Mubarak, who currently produces around 800 types of electrical products, said: “My factory employs 30 to 35 workers. Right now I am selling products worth Tk 8-10 lakh per day.

Like him, more than 2,500 new entrepreneurs have ventured into electrical manufacturing over the past 10 years. Starting with a capital of Tk3-Tk5 lakh each, many of them now have working capital of up to Tk1 crore, industry insiders say.