— Hiten Khatau, CMD,
Cable Corporation of India Ltd
Set up in 1957 as an Indo-German collaborative effort,
Cable
Corporation of India is synonymous with India's cable industry
having to its credit many firsts like the country's first EHV cable
producer.
Hiten Khatau sheds more light on the current status of
the overall cable industry, which recorded a decline in the first
quarter of FY13. Khatau is cautiously optimistic on the prospects,
asserting that much depends on the pace of implementation of
government-sponsored power sector projects. An interview by
Venugopal Pillai.
The electrical equipment industry, and in particular the cables
industry, showed negative growth in the first quarter of FY13.
What is your reaction?
Yes, the cable industry has shown negative growth in the first
quarter and this is likely to continue during the second quarter
too. Main cause is the delay in implementation of proposed
projects and the general slowdown in all spheres. Once
Government initiatives are in place, we expect demand to
bounce back. We expect fourth quarter should be good.
However, the year has already borne the brunt.
Slowdown in the implementation of government-sponsored
projects in the power sector appears to be a universal feeling.
What is the ground reality?
The ground reality is same as the general feeling!
Implementations are delayed and lost time may not be made
up. Also there is considerable delay in realization of payments,
adversely affecting cash flows. Overall it's a difficult period and
we will have to wait for the situation to improve.
What is your view on the several multinationals that are setting
up manufacturing facilities for EHV cables in India?
Yes, multinationals are setting up plants and this is going to
increase competition. Projected demands are not yet
happening and this is going to lead to capacities in excess
of demand, even in the EHV segment. The situation of
over-capacity already exists in other segments like LT/HT
cables.
Even otherwise, multinationals today are importing
and supplying from abroad very low prices. All this is because
we do not have any policies in place favouring local
manufacturers.
All said, EHV cables do appear to offer a feasible solution to
India's power distribution needs in urban and semi-urban
areas. How do you gauge the demand prospects?
All utilities have a plan in place for transmission of bulk power
over high voltages to reduce losses. Time frames shall get
decided with actual availability of power and requisite finances for executing these plans. The implementation will depend on
the implementation of power generation projects planned by
government.
CCI has been a pioneer in EHV cables. Tell us more on the range
and also the current status of CCI's plans to make 400kV EHV
cables.
We have already made 400kV cables which are under testing.
As usual, we are ready ahead of demands coming in. We
definitely hope to cash in on opportunities as they arise.
What is your outlook for the power cables industry in the wake
of huge investment outlays for the power T&D sector but also
keeping in mind the general slowdown?
The Government has made ambitious plans. But we are behind
schedule in implementation of plans. The outlook seems good
as the plans will get implemented. But definitely prices are
going to be under pressure with the capacities being built. We
will have to operate efficiently to keep afloat. The revenues will
happen but we need to watch the bottom lines; they are going
to be difficult to achieve!