By Vivek Ratnakar
Has the potential to reach $70 billion by 2010 and $158 billion by 2015. The Indian wire and cable industry, therefore, has the potential to grow at a brisk pace as demand for quality cables and wires will increase with the high growth in consumer electronics, automotive and telecom sectors. But the picture is not all that positive when we look at the current trends. While the demand in the Indian wire and cable market is growing rapidly, very few manufacturers are being able to provide quality products. Besides, according to data compiled by IEEMA, the overall growth for cable industry was merely 4.5 per cent in 2008-09.
Major brands and new trends
According to an estimate, the Indian wire and cable industry is dominated by more than 265 organised and unorganised players, accounting for around Rs 7,000 crore in terms of sales. The industry is highly fragmented with many hundreds of companies, a larger total that cannot be found in any other country except China. Many of these companies are small scale manufacturers, the smallest of which are the family-run operations with only the most basic of production equipment.
This unorganised sector comprise the light duty cables (LDC) market, which mainly serves the electronics industry. However, there are also some well known brands as well, like Finolex, Unistar (Universal Cables), Vindhya Telelinks, Birla Ericsson Optical, Sterlite Optical Technologies, UM Cables and Kalinga (RK Electrical Industries).
Let’s divide the electronics wire and cable products into audio-video, networking, automobile and consumer electronics segments to take a brief overview of the industry as a whole
According to iSuppli Corp, the Indian audio-video market will grow to Rs 26,931 crore ($6.59 billion) by 2011. Thus, the audio-video cable manufacturers are bound to reap the benefits from this growth. With the growing demand for products using digital signals like HDTVs, Play Station, HD-DVDs and Blu-ray players, market experts believe that high definition multimedia interface (HDMI) standard cables that can cut down on the number of cables required to connect components, will lead the growth of the audio-video cable segment in the coming years. In this segment, the brands include Bosch, Sony, Panasonic, AMX, Falcon Cables (Hitech Products Pvt Ltd), Rayhom (Rajsav India Pvt Ltd), Belden, Chetan Cabletronics, Tri-Com (JCI Cables), Setmi, etc.
In networking cable segment, most of the players failed to keep up the growth momentum they showed during the last fiscal 2009 but in 2010 the growth outlook seems promising, especially for optical fibre cables.
With new players like Swan, Unitech Wireless and Sistema Shyam Teleservices are expected to enter the Indian market, the fibre cable demand size will remain around 8 million km for 2009-10 and could grow substantially in the next couple of years. “This growth will be mainly dictated by the demand from networking and power companies like Power Grid Corp, who would be using optic fibre cables for their entire network,” says Sanjeev Vinayak, senior vice president, Scot Innovation Wires and Cables, which manufactures cables under the brand name of Ekta Cables.
In networking cable segment, key players in the organised sector are Sterlite Technologies, UM Cables, Finolex, Birla Ericsson, Aksh Optifibre, Paramount Cables, Vindhya Telelinks, RPG Cables, Telephone Cables, Bhagyanagar Metals, GR Cables, Gujarat Telephone Cables, Andrew Telecom and Scot Innovation Wires and Cables.
With the growing number of components in automobiles, the requirement of automobile cable will be even more in the future. Automobile wiring segment mainly constitutes power, hook up and control cables. Majority of these cables are manufactured in small sectors as the capital required is low. Of these, the value of control cable market is about Rs 2,100 crore. But according to IEEMA, declining trend has been observed for control cables indicating 27 per cent fall in production.
PVC cables are the most common automobile cables available in the Indian cable market today. However, due to environmental consideration, auto manufacturers are under societal pressure to use halogen free cables as well.
According to Piyush Jindal, managing director, RJ Industrial Corp, zero holgen cables and wires are the new innovative products available in the market. “The new product has advantage over the low halogen cables or PVC cables, as the former does not produce hydrochloric acid when burnt. It is this property of the new product that makes it safer in case of fire. The product finds its application in places where human safety is very critical like in subway trains or automobiles,” Jindal adds.
Besides, teflon cables also find application in modern automobiles due to their ability to resist higher temperatures. Teflon cables are also lighter in weight. “Teflon cables have advantage over PVC cables because while a PVC cable can stand only 70 degree celcius, a teflon cable can stand temperature upto 250 degree celcius. Thus, demand for teflon cable is bound to rise in near future,” says Rakesh Goyal, director, Chetan Cabletronics.
In automobile cable segment, Suprajit Engineering is India’s largest automotive cable manufacturer. Other significant manufacturers include Sadhavi Auto Ltd, Finolex, Belden and Scot Innovation.
In consumer electronic segment, personal computer cables and close circuit television camera (CCTV) cables have picked up growth. But this segment is also dominated by players from unorganised sector. However, a few manufacturers like Chetan Cabletronics, Bhansali Cables and Conductors, Universal Spares, etc, have been able to manufacture cables confirming to international quality standards.
The demand for electronics wires and cables is mainly from growing sectors like telecom, information technology, automotive and consumer electronics. According to Naveen Gupta, director, Chetan Cabletronics, one of the most significant trends in the Indian wire and cable industry that has been observed lately is end users’ demand for technology solutions that improve system performance, optimise system cost and increase reliability of power delivery.
Sheel Kumar, a shopkeeper at LajpatRai Market, Delhi, agrees with Gupta. “Low quality cables from China are cheaper than the Indian products and customers often ignore the fact that they do not come with replacement guarantee. This costs them dearly in the long run. Many customers now prefer branded cables,” he says.
“A greater appreciation for quality products among buyers has been shifting the focus of the cable manufacturers towards quality. As more and more cables are being installed, there is an imperative to go beyond just meeting minimum standards at lowest price possible. The focus is rather on achieving consistent and long term performance,” Gupta adds.
Types of cables & applications
Basic cable types present in the market today are coaxial cable, multicore cable (consist of more than one wire and is covered by cable jacket), ribbon cable, shielded cable, single cable, twisted pair and twisting cable.
Based on construction and cable properties the cables can be mineral-insulated copper-clad cable, twinax cable and flexible cables. On the basis of insulation material, types of cables can be PVC cables, teflon cables, etc. Optic fibre cables are a technological improvement over jelly filled cables in terms of transmission, speed and capacity to transmit low power signals. A single cable has the capacity to transmit signals from few kilobytes to 100s of gigabytes.
The cables used in electronics industry are low tension cables. In audio-video segment, cables used are composite cables, S-video cable, component RGB cable, RCA stereo cable, SPDIF digital cable, subwoofer cable, toslink optical, coaxail, camcorder cable, USB cable, camera cable, fire wire cable, serial parallel cable, HDMI cable, etc.
In networking segment, for special cabling needs like in ATMs, data centres, Ethernet networking, government and manufacturing environment, twisted pair cabling systems are used which have been specified into categories (the singular is commonly referred to as ‘Cat’), specified in terms of the data rates that a cable type can sustain effectively. The specifications describe the cable material as well as the types of connectors and junction blocks to be used in order to conform to a category. These categories are Cat-3, Cat-4, Cat-5, Cat5E, Cat-6, Cat6E and Cat-7.
The automobile sector cable like brake cables, clutch cables, throttle cables, starting cables, gear shift cables, choke cables, speedometer, tachometer cables, window regulator cables, mirror cable assemblies, seat recliner cables, latch release cables, etc.
Today, there are numerous applications of wires and cables in telecommunications, networking, automobile, medical and consumer electronics segment. Modern cables come in a variety of sizes, materials, and types, each particularly adapted to its uses. Flexible cables are used for portable devices, mobile tools and machinery. Coaxial cable is used as a transmission line for radio frequency signals, in applications such as connecting radio transmitters and receivers with their antennas, computer network (Internet) connections and distributing cable television signals.
Similarly, while multicore cables are frequently used in the professional audio industry, ribbon cables (also known as multi-wire planar cable) are commonly applied in internal peripherals in computers, such as hard drives, CD drives and floppy drives. For application in vehicles and field communications equipment, the cables are designed to resist abrasion due to diesel and oil and aggressive environment. Thus, from computers, vehicles, to high speed data connection equipment for live broadcast, wires and cables shoulder the responsibility of carrying data and energy from one component to another.
There are broadly three types of buyers who come to the market. The first category of buyers is loyal to their suppliers and trust the quality and price offered to them. The second types of buyers are price conscious and are likely to compromise on quality or brand. They usually scrutinise the market before making a final decision on the purchase. However, there is a third category of customers who want quality products and are ready to pay any price as long as they are convinced about the authenticity of the product.
“Now-a-days, buyers usually demand quality certificates. In some cases they choose independent testing facilities rather than in-house testing facility of the manufacturers to test the products. Some quality conscious customers also demand RoHS cables like led-free cables, as environment has become a big issue now,” says Gupta.
Choosing an adequate wire or cable for any purpose is very important for the buyers. While choosing audio cables, one should keep in mind that cost does not determine quality. A lower cost cable may actually be more suitable for a given signal type and usage than a more expensive cable of the same type.
In addition, there are many key distinctions among similar looking cables. Parameters like number of conductors, size and construction, geometry between pairs, shielding, insulation, jacketing and cable configuration should be kept in mind before determining the cable. The technical specification requirements to be aware of are capacitance, resistance, attenuation and impedance.
There are different types of video connections for VCR, DVD, TV and HDTV equipment. Ranking of video cables from lowest to highest picture quality is composite video (RCA or F-pin), S-Video, component video, DVI (digital visual interface) and HDMI.
Similarly, type of networking protocol and related bandwidth are important factors in determining networking cable type. Currently, the most common protocol for data networking is Ethernet and specific Ethernet protocols may be selected by bandwidth such as 10 megabit, 100 megabit, 1,000 megabit (or 1 gigabit) and 10 gigabit.
The lower the bandwidth, the lower the performance—which requires a less expensive cable. Likewise, higher bandwidth means higher performance and expensive cable.
“In a typical office building or similar space, 100BaseT and 1GBaseT Ethernet are the most popular protocols used. These protocols support the bandwidth for most office-type applications because 1GBaseT is able to support network bandwidths to the desktop for the next 5-10 years. Cat5e and Cat 6 cables can support these protocols; Cat 5e cable is the less expensive of the two,” says Tyagi.
Although both these cable types will support the same types of Ethernet, the Cat 6 cable is rated to a higher frequency with higher performance characteristics. The alternative to the Cat 5e cable is the fibre optic cable for industrial environments.
While buying automobile cables, the buyers should look for factors like wire strength, flame retardancy, diameter and weight, corrosion, erosion between wire strands, bending fatigue and coating material.
In the Indian cable industry there is a large or unorganised sector. Some small cable companies compete by selling products of dubious quality at low prices. While such a ‘black market’ sector exists in other countries as well, it is particularly a big problem in India. Small local cable producers may be encouraged in some market sectors (for example PVC cables) by legitimate tactics, such as price preferences, but in the unorganised sector almost anything goes.
In some instances small cable producers bypass the regulations that large and medium-sized cable producers have to follow. Companies in the unorganised sector may avoid paying taxes or take advantage of unmetered power supplies intended for agricultural users.
“Our products follow ISO and IS standards but in the past we have faced several situations where spurious cables with our brand name have entered the market. But now we have introduced special holograms to distinguish our products from fake ones,” says Naveen Soni, marketing head, Bhansali Cables. Many cable manufacturers continue ignoring the manufacturing standards despite repeated raids by BIS.
Copper Vs cable price
A favourite of the wire and cable industry, copper possesses excellent electrical conductivity and finds widespread use as an electrical conductor in everyday wire and cable products.
As the price of copper directly affects the price of wires and cables, those involved in the wire and cable industry—both suppliers and customers—are affected by any fluctuation in copper prices.
According to Chetan Cabletronics director, although the labour cost for manufacturing cables may remain low, material cost that mainly includes the copper price determines the price of final products. Vinayak of Scot Innovation Wires and Cables also agrees that any change in the copper price directly affects the cable buyers. The most obvious reason for the rising price for any commodity is demand. Copper is no different. Many analysts agree that China’s performance and industrial activity are the most important factors driving copper prices and volumes today. It is estimated that 30 per cent of the world’s copper consumption is in China.
Apart from these, there are a host of variables that go into the production and price of copper. In parts of Asia and Africa, copper production can be affected by political unrest, in North and South America, prices can be affected by labour unrest. Other factors to consider are weather as a major drought or flood hitting a mine, or the transportation routes of supplies to the mines, would create a lower copper supply and subsequently increasing the price per pound for the metal.