Posted 15 October 2012
An ever increasing array of products is now coming into the UK from the Far East. Although bras have been hitting the headlines in the recent bra wars, the effect of cable imports from around the world has devastated the UK cable industry with an estimated 80% of production capacity lost in the last 10 years.
Some would argue that UK manufacturers had become complacent, trying to distance themselves from customers by putting ever increasing layers of wholesalers and distributors between them and the end user. The need for profit from the big wholesaler chains has resulted in them looking abroad for competitive pricing whilst continuing to beat down the manufacturers until it becomes no longer viable for them to continue producing in the UK.
Of the few that do remain, most are global players sometimes sourcing products from afar and acting as manufacturers / distributors with no stocks and long lead times for products that are deemed not cost-effective to produce in the UK by the ‘bean counters’.
It’s a sad reality that price and not service is becoming the focal point for many producers today. How different things could have been if the question was ‘when do you need it’ as opposed to ‘how cheap do we have to be?’ Ultimately the question we are now faced with is ‘can we live without China and the Far East?’
The answer is an emphatic ‘no’.
If you take Category 5 structured wiring cable for example, there are very few manufacturers left in Europe willing to make it. This is in part due to prices dropping so low two years ago that several manufacturers simply diverted production capacity to more profitable lines or closed factories altogether. Certainly, some big names still sell their branded product but much of this is of Far Eastern origin that has been badged.
Recently, prices have roughly doubled (partly down to copper) and the profit has come back, this time for the Chinese. Sadly, many of the European producers are unable to gear back up to making these products leaving the market vulnerable.
The range of products coming from the Far East is increasing but mainly concentrates on cables with a high labour content either in production or reeling. Certainly the quality offered by the best factories is excellent, with consistency, packing and reliable deliveries all adding to the service.
The worry centres on an increasing dependency. The rapid price rises last year brought about by the soaring copper market found prices going up by as much as double the amount needed to cover the copper
rise. Profiteering, or the realisation that the West had little option but to accept these price increases meant that any resistance was met in many cases with a ‘take it or leave it attitude’.
It is vital we keep production capacity in Europe even if we can’t keep it in the UK. At the moment, power cables appear to be safe, due to their bulk and high transport cost with relatively little, other than a few small booklet armoured cables, coming in from China. India has been waiting in the wings for 15 or 20 years now but as yet quality issues have held them back. Don’t count on that lasting much longer however, as they have a well educated workforce who will soon want a slice of the European market for themselves.
But it is also the manufacturers responsibility to look beyond price and meet the needs of the customer in both service and product quality. We don’t want to see import restrictions on cables like the bra wars of 2006.