SHANGHAI, Sept. 16 (SMM) – Tight money supply has spurred the reshuffle in wire and cable industry in Jiangsu’s Guanlin County – home to hundreds of wire and cable producers including Jiangnan Cable, Shanghai Metals Market (SMM) learned.

Jiangsu’s Hengyuan Wire & Cable went bankruptcy as the company ran out of cash due to reckless expansion and mounting debts. In this context, SMM surveyed a number of wire and cable producers in Guanlin, and found that a majority of them have suffered from tight cash flow in recent years.

A source from a large enterprise told SMM declining housing investment and home sales this year have dealt a blow to local wire and cable makers. “Apart from falling orders, the cash problem plaguing housing market was passed along to wire and cable producers, as many property developers failed to pay in time,” the source said. The financial pressures grew after banks tightened lending controls this year, forcing SMEs which are highly dependent on bank loans to turn to informal lenders, in turn pushing up their financing costs and exposing them to higher risks.

At the same time, those large enterprises of financial strength, such as Far East Cable, Samson Cable and Yuanfang Cable, are expected to present satisfactory performance this year. SMM also was informed that over 20 wire and cable producers in the region went bankruptcy or were acquired by other companies this year. SMM believes the cash strains will result in further consolidation in wire and cable industry in Jiangsu.

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