State-run Gazi Wires struggles with financial losses, primarily due to excessive dependency on government contracts for its business operations
In Bangladesh, Gazi Wires Limited, a state-owned copper wire manufacturer, has been grappling with significant financial losses over the past few years. The primary cause of these losses can be traced back to a halt in government procurement from the Bangladesh Rural Electrification Board (BREB), which has not made any purchases from Gazi Wires for the past four years due to high prices [1]. This lack of procurement has led to losses of Tk5.63 crore in FY24 and Tk5.41 crore by April in FY25 [1].
To address these financial and marketing challenges, Gazi Wires is considering several strategies. One such strategy involves diversifying its sales channels. The company plans to reach out to large private companies in Dhaka, a move that could help expand its market and reduce its dependence on government procurement [1]. Additionally, exploring markets in other regions, such as Chattogram, where there is existing demand, can help stabilise sales [1].
Another strategy focuses on product pricing and quality. Gazi Wires needs to assess its pricing strategy to become more competitive. Reducing costs while maintaining quality could make its products more appealing to both government and private buyers. Ensuring that products meet high standards can enhance customer satisfaction and loyalty, potentially leading to increased sales and government contracts [1].
Bureaucratic and regulatory engagement is another crucial aspect. The industries ministry is working with the power and energy ministry to resolve procurement issues. Maintaining open communication channels can help expedite government purchases [1]. Ensuring compliance with all regulatory requirements can improve the company's reputation and make it more attractive to government contracts.
Investment in marketing and branding is also essential. Developing robust marketing strategies can increase awareness and appeal of Gazi Wires' products in both local and national markets, potentially attracting more customers [1]. Operational efficiency is another key area of focus. Reviewing and optimising production processes can help reduce costs and improve profitability, making the company more competitive in the market [1].
State-owned entities often face bureaucratic complexities, and there is no dedicated budget for this sector. Gazi Wires is not the only copper wire manufacturer in Bangladesh; BRB Cables and Super Shine are other companies producing copper wire in the country. Various fan, AC, and other electric product manufacturing factories in Bangladesh purchase copper wire from Gazi Wires [1].
The production cost per kilogram ranges from approximately Tk1,600 to Tk1,800. Gazi Wires employs 128 employees, including officers and laborers. To break even, the company needs to produce 800 tonnes of wire. However, in FY24, it produced only 267 tonnes, and in FY25 (as of April), it produced 87 tonnes [1].
The domestic copper wire market in Bangladesh is estimated at approximately 3,000 tonnes annually. Market insiders believe that global copper prices could increase by over 75% within two years due to the growing gap between supply and demand [1]. Gazi Wires produces copper wire from virgin raw materials, making its products more durable compared to those made from scrap [1].
Md Abdul Halim, an official, expressed optimism, stating that BREB officials were satisfied with the product quality and that the industries ministry is communicating with the power and energy ministry to resolve the issue [1]. Global demand for copper, an essential metal in renewable energy, is surging as the world focuses on increasing the use of renewable energy sources to combat climate change [1].
Gazi Wires produces three types of wire: Super Enamelled Copper Wire (gauges 12 to 46), Annealed Copper Wire (gauges 10 to 46), and Hard Drawn Bare Copper Wire (gauges 1 to 46) [1]. Super Enamelled Copper Wire accounts for the majority of its sales and production. Many government institutions, including Gazi Wires, are facing losses due to a lack of effective marketing policies and strategies [1].
Sources: [1] The Daily Star, "Gazi Wires Limited: Financial Losses and Potential Solutions," [date of publication not provided]
- To overcome financial losses and expand its customer base, Gazi Wires plans to diversify sales channels, targeting large private companies in Dhaka, and explore new markets in regions like Chattogram with existing demand.
- Recognizing the need for competitiveness, Gazi Wires is considering strategies to assess product pricing, reduce costs while maintaining quality, ensure regulatory compliance, and invest in marketing and branding to increase customer appeal, satisfaction, and loyalty.
