Cable and wire manufacturer Southern Cable Group Bhd is targeting higher overseas revenue in the financial year ending 31 December 2022 (FY2022) as regional demand for cables and wires improves in line with recovering economic activities.
Southern Cable registered three consecutive quarters of export growth since mid-2021 to reach RM7.2 million in the first quarter ended 31 March 2022 (1Q22), on higher sales of power cables and wires to Myanmar and Singapore.
As of 31 March 2022, Southern Cable is slated to fulfill RM628.6 million worth of orders in hand over the next two years, of which overseas represent less than 1%.
While expecting to continue the regional momentum from recovering economic activities, the Group also hopes to penetrate into the United States (US) market in the second half of 2022.
Managing Director of Southern Cable Group Bhd, Mr. Tung Eng Hai said: “We are ready to support the improved economic activity especially in our existing markets of Myanmar and Singapore, as they accelerate the pace of infrastructure and development projects.”
“Building on our strong track record in supplying power cables and wires, we are also undergoing final stages of testing and evaluation for our in-house developed XHHW-2 industrial cables for a customer in the US, for use in residential, commercial and industrial buildings. We delivered the trial products to the customer this month, and barring unforeseen circumstances, hope to sign a distributorship agreement in the second half of FY2022.”
Compared to ordinary cables, the XHHW-2 industrial cables offer stronger resistance to heat, water, and corrosion, as well as greater durability and flexibility.
Tung indicated the potential growth in demand for cables and wires from the US, as players increasingly source from Southeast Asia as part of their supply chain diversification strategy, following China’s COVID-related lockdowns and trade war uncertainties.
Tung added: “We have received numerous enquiries since mid-2020 from US distributors and have undertaken the necessary quality certifications to meet their requirements. Once the pilot is successfully completed, we would endeavour for this to be a first steppingstone towards even more distributorships and meaningful contributions in the future.”