By Atanu Kumar Das
The wire and cable market in India is going through a mixed phase, primarily because of the recession. The housing sector has seen a collapse in the last one year, hitting the industry severely. Steel and cement plants have put their infrastructural expansion plans on hold and this has also impacted cable and wire manufacturers negatively. However, the demand seems to be sprouting from telecommunication and government-funded projects. Therefore, the players who are flourishing currently, are those who have a gamut of offerings from different industry segments or those who can diversify swiftly and offer products to the segments with demand. Electronics Bazaar spoke to some leading players and came to deduce that while some players are content with their performances, others have reached a stage of consolidation.
According to a spokesperson from Sterlite Industries, “The growth and demand in the wire and cable vertical is enormous, but it is extremely costly to invest in this sector. A lot depends on the London Metal Exchange (LME); if that does well, we will witness the effects in India as well. Recession has made positive and negative impressions on the market. The bigger players who have invested heavily in bookings with LME are suffering huge losses, whereas small players, who offer secondary material only, are sailing through. Ideally, the usage of secondary material is not suitable, but since the market is small, it has proved to be beneficial.”
K C Das, general manager, Nicco Corporation Ltd, is also of the opinion that recession has affected the wire and cable market badly. “Steel and cement plants have postponed their expansion plans, when players have already invested heavily in them, delivering a massive blow to the sector. Since the industry is going through rough weather, we don’t have big expansion plans as of now. Right now, the focus is just on staying afloat. There are good investment opportunities, but not enough funds to foster them. We want to go further with extra high voltage cables but as the market is down, we have put the plan on hold. Also, we wish to revamp the entire machinery and production process in the coming years,” adds Das.
Saviours of the market
Presently, most dominant players have halted their expansion plans, stunting the wire and cable market. Government projects and investments in the telecommunications segment have emerged as saviours of the market. “We see demand for cables and wires in the infrastructural projects funded by the government, in public sector units and the entire government industry, besides some segments in the private sector like steel and cement. The inertness in the housing sector is in effect, crushing the wire market. We are in the process of re-commissioning our EHV plant in Nashik, which has been relocated from Borivali, Mumbai, and is expected to give a momentous thrust to our corporate turnover and profitability. We are targeting high technology products by introducing specialised application cables for defence, mining and airports and by focusing on value-added products,” comments a Cable Corporation of India spokesperson. Naveen Gupta, director, Chetan Cabletronics, feels that telecom has had a multiplying effect on the cable and wire industry. It has pushed the frontiers in cable manufacturing techniques. “We are concentrating on the telecom industry as we observe a lot of unmet demand in India. Renewable energy is also an area we are paying attention to,” he says.
Rakesh Goyal, director, Chetan Cabletronics, states, “What makes us more prominent than other players is the level of backward integration and wide spectrum of quality-centric products that we offer. The wire and cable market today is growing above the rate of our gross domestic production (GDP) and we expect this trend to continue in years to come.”
Let us study some of the major players in the wire and cable sector.
Cable Corporation of India: In 1957, two eminent Indian business houses and two salient German engineering firms joined hands to form a company for the manufacture of power cables. Cable Corporation of India (CCI) was incorporated on November 1, 1957 as a venture between Siemens AG, Khataus, Felten & Guileaume AG and Thackerseys. The company commenced its manufacturing operations in an area of 150,000 m2 in Borivali, a suburb of Mumbai. The plant was established incorporating Siemens expertise and technology in its building design, layout, manufacturing processes, product design and technologies. In March 1997, a second contemporary plant for low tension cables, spread across 67,000 m2, was commissioned at Sinnar, Nashik.
With two manufacturing facilities, CCI has the capability to indulge tight delivery schedules and large quantities of requirements of its discerning customers. Its product range, which started with PVC wires and cables and PILC cables, has grown significantly to 220 kV cables and a variety of insulation materials. In the last 40 years CCI’s turnover has touched US$ 70 million and it has now attained a 21 per cent market share in the organised domestic cable industry. The company, which started with a small core group, has burgeoned to a large family of 1,200 dedicated and trained professionals.
Nicco Corporation Ltd: Nicco Corporation Ltd (NCL) is the flagship company of the Nicco group and is one of the pioneers of the Indian cable manufacturing industry. The company has provided vital inputs for various key sectors of Indian industries. From the time of its inception, NCL has kept pace with the changing times by developing its own know-how for the constant amplification and update of its product range. Starting from research and development (R&D) to the manufacturing of high-end products, Nicco’s continuous endeavour to perfect product quality has earned it the complete confidence of all its customers, both at home and overseas.
Finolex Cables Ltd: Finolex Cables Ltd, the flagship company of the Fino-lex group, was established in 1956 in Pune. Today, it is India’s largest manufacturer of electrical and telecommunication cables, with a turnover of Rs 6,275 million. The concern started its operations with the manufacture of PVC insulated electrical cables for the automobile industry. Since then, the company has constantly strived to augment its product range to include PVC-insulated electrical wires, flame retardant low smoke electrical wires, PVC-insulated single core and multicore industrial flexible cables, PVC-insulated winding wires, 3-core flat cables, power and control cables, polythene-insulated jelly-filled telephone cables, auto and battery cables, co-axial and CATV cables, LAN cables, switchboard cables, fibre optic cables and others.
The enterprise has manufacturing facilities in Goa and Pimpri and Urse in Pune. The company has, over the years, established its reputation as an innovative leader and quality manufacturer by continuously upgrading technology, modernising manufacturing facilities and maintaining high standards of quality and services. Today, the name Finolex has become synonymous with quality and enjoys overwhelming patronage of customers. Investors have also appreciated its stock in view of its phenomenal progress, leading to a manifold increase in stock investments through the years. The company has received the ISO 9002 systems certification across all product lines and plants. The ISO 14001 certification has been accorded to its plants in Urse and Goa. A similar certification for its Pimpri unit is under processing.
Chetan Cabletronics Pvt Ltd: Chetan Cabletronics was founded in 2002 and in the last seven years, has earned a reputed name in the cable industry. The company has the branded products and the expertise that today’s advanced technology companies have come to rely upon in their most critical application—flexible cables, multicore round cables, PTFE and VGA cables, CCTV cables, CAT 5 cables, speaker cables and durable harness products. Its offerings are the preferred choice of computer, telecommunication, medical, semiconductor equipment manufacturing, industrial automation and other application critical industries. Indeed, it has carved a niche for itself in the arena of electronic wires, cables, connectors, sleeves and panel accessories.
Telecom and automobile sectors are both experiencing a boom hitherto unseen. However, wire and cable applications in these industries have to perpetually adapt to changing trends and the exacting demands of major players. As a part of its strategic growth efforts, Chetan Cabletronics plans a renewed thrust in both these areas with new, custom-designed products, which fit and suit diverse requirements. In the telecom domain, its product categories are RF cable assemblies, mobile phone-PC data cables, telecom aerial cables, networking cables, CAT 6 cables, CAT 5E cables and phone cords. In the automobile section, it offers products like automotive wires, power cords, jumper cables and automotive battery terminals.