EA cables to commission new plant

By JOHN NJIRAINI

East Africa Cables is this month set to commission a new production line to increase capacity and efficiency in the wake of rising competition.

Managing Director George Mwangi said the new ultra-modern production line at the company’s Nairobi plant is aimed at ensuring the East African market is sufficiently served amidst threats posed by China that is consuming more than 20 per cent of the world’s copper.

"Though we are concerned over the continued volatility of the world metal prices and the challenges posed by China, we have laid out elaborate plans to create value and benefit customers in the regional market," said Mwangi.

He added that the company, which recorded a profit drop of 123 per cent for the half year of 2010, has been forced to gradually increase the prices of its products to a cumulative of 80 per over a past one and a half years in line with the movement in metal prices that have been very volatile.

The latest increase was in October last year when the Nairobi Stock Exchange listed manufacturer effected a price increase of 18 per cent on its copper products.

Mwangi said the average metal prices for copper have consistently risen over the last two years from $5012 (Sh400, 960) per tonne in June 2009 to $9,147 (Sh731, 760) per tonne by the end 2010.

Aluminium prices have also increased from $1,413 (Sh113, 040) per tonne to $2,350 (Sh188, 000) over the same period.

This represents an increase of 84 per cent and 50 per cent in copper and aluminium material prices respectively. "Over a period of more than one year copper prices have risen significantly with similar progressive price increases," said Mwangi.