Southern Cable to ride on nation’s infrastructure growth, 5G

PETALING JAYA: Cable and wire manufacturer Southern Cable Group Bhd is targeting to ride on higher demand for cables and wires, as the nation embarks on its infrastructure growth and 5G network expansion plans.

Recently the group had seen higher orders for power cables and wires, including from the power, renewable energy, telecommunications, and construction and infrastructure sectors. The larger orders are in line with gradually improving economic activities as more states in Malaysia enter Phase 3 and 4 of the National Recovery Plan.

Southern Cable managing director Tung Eng Hai said the group is optimistic of higher power cable and wire sales going forward, which will also be supported by new projects under the 12th Malaysian Plan and upcoming Budget 2022.

“We are upbeat on significant investments into new data centres and rollout of the 5G network nationwide, in line with Malaysia’s target to become a digital economy leader in the region by 2030. We will supply not only more communication cables and wires, but also related communications equipment such as rectifiers, and power and distribution systems,” Tung told reporters during the virtual press conference today in conjunction with its transfer of listing to the Main Market of Bursa Malaysia Securities Bhd, from ACE Market previously.

The prices of raw materials have increased due to uncertainty in global commodity prices in the past 12 months, but Southern Cable group general manager Ooi In Keong said the price hikes had not affected the group’s cash flow.

“The group has short term purchase orders and long term contracts. We are able to pass down these (increased) costs to the customers in the short term purchase orders as we quote our customers based on daily price. Our long term contracts are with public utility companies such as TNB but the price is subject to change every three months so we will minimise the risk of commodity price fluctuations,“ Ooi said.

Although the group saw supply chain shortages during MCOs, he said the group is able to mitigate the shortages because imported raw materials such as copper and aluminum were not affected; while the group was impacted by local supply raw materials such as sawn timber shortage that affected wooden cable drum manufacturing.

“Currently, we are in a recovery stage and will do better in the fourth quarter,“ Ooi said.

The group’s current orderbook stood at RM324 million as of Sept 30, 2021 from public utility companies such as TNB, Telekom, and energy sector in East Malaysia.