—Amit Jain, Managing Director, CMI LtdSpeciality cables appears to be your forte.
Yes, at present, we make more than 1,000 types of cables, mostly in the category of specialty cables. We are manufacturing cables with different constructions and by using different raw materials with specific parameters to meet specific customer requirements.Are you planning any new products in the near future?
We are in the process to manufacture overhead traction cables, i.e. grooved copper conductor and copper cadmium catenery wire for use in electric traction in Railways and the necessary plant and machinery is being installed. There will be huge demand of these wires as Indian Railways is poised for electrification of its tracks in big way. Out of 65,000 km of tracks, only 28,000 km has been electrified so far. Not only this, there will be huge demand by different metros and various freight corridors, coming up in different cities.
We are coming up with a facility to manufacture HT (high tension) cables and have a full production setup where we shall be manufacturing cables for up to 66kV grade. The present government has big plans to improve upon power infrastructure in the country. India is far below in per capita power consumption as compared to other developed countries. There is expected to be huge demand of high voltage power cables in the country.CMI has been a case of remarkable turnaround after the new promoters took over the ailing company in 2002. Tell us in brief about this journey.
CMI Ltd, incorporated in 1967, commenced business in 1969 as a copper trading company and in early seventies started wire drawing of non–ferrous metals especially copper. In 1980, CMI diversified its activities by setting up facilities for the manufacture of dry core telecommunication cables. CMI slowly shifted emphasis from copper trading to cable manufacture, where value addition was higher. With the aid of its in–house research and development, the company started the manufacture of fire resistant low smoke cables, instrumentation cables, control cables and in 1990, we commenced production of JFTC.
In 2002, we acquired the company, which was then a loss-making sick company, from its erstwhile promoters. In the last 13 years, the company has not just come out of the red, but is also registering cash profits. From Rs.5.60 crore revenues in 2004-05, the company closed 2014-15 with revenues of Rs.137.28 crore.
We shifted the focus to new product development with the emphasis on latest technologies. We have also exported cables to Sri Lanka, Bangladesh and Iran Railways in bulk quantities.CMI appears to have a clear focus on special-purpose cables. Do you intend to diversify into wires & cables for power distribution?
As earlier discussed, we are coming up with the facility for manufacturing HT cables up to 66kV on the belief that Make in India campaign will lead to rapid thrust on industrialization the demand for power is likely to increase tremendously.Of your wide product range, which category of cables would you regard as your main growth driver?
Railways and oil & petroleum industry contribute maximum to our sales turn over at present with Railways accounting for around 60 per cent of the revenues and oil and petroleum industry accounting for another 20 per cent or so.
In the product category quad cables and Ballise cables would be our main growth drivers used by Railways. These are specialized safety cables used for counting incoming and outgoing axles/coaches at any particular section to ensure no coach is left behind while Ballise cables are for train protection and warning system. This enables the controller to map the trains as being done on runways at airports.In the telecom sector, do you intend manufacturing optic fibre cable given its increased preference over jelly-filled cables?
Keeping in mind the keen interest and thrust of the Indian government to improve communication and data transmission, there will be a huge requirement of OFC cables and CMI is focusing on R&D to develop better quality cables than that available in the market today. At present though, the focus is mainly on specialised cables.Competition from low-cost Chinese products is a matter of concern across the entire manufacturing sector. What is your view when it comes to speciality cables?
Chinese substandard imports are the main reason responsible for creating negative perception about the cable industry but now the industry is gearing up to take the challenge head-on and is creating awareness about the need for certifications and educating the influencers in the category. The customer is now more quality conscious and instead of cost, wants quality and durable cables meeting stringent parameters. In terms of speciality cables, how would you gauge India’s self-sufficiency? Are there some types of cables that need to be imported?
India is still importing EHV cables above 220kV, some special marine cables for use under sea water, mineral insulated cables for nuclear energy department, high temperature cables etc, leaky coaxial cables, etc. Indian industries can cope up with the production facilities, may be in collaboration with manufacturers abroad and has all skill, knowledge and determination to “Make in India”.At this juncture, do tell us your views about the relevance of the “Make in India” mission to the speciality cable industry? How do you see the emergence of multinationals setting up manufacturing facilities in India?
The philosophy and mission “Make in India” of our Prime Minister is the need of the hour. Instead of waiting for years to develop technology here, we should take advantage of development already done elsewhere and use the same here to improve facilities.
The “Make in India” concept is to use our manpower technical/skilled/unskilled and qualified personnel in any other field, use our raw materials and semi finished products available here, use our services and create job opportunity. They can export from here and they have advantage of comparatively low cost skilled manpower. The incoming industry has to plough back their earning here to develop other facilities, earn for themselves and to improve employment here and raise standard of living of our vast unemployed youth.
The emergence of multinationals setting up manufacturing facilities in India should not be threat so long as the development takes place here. It should not be only “screw technology,” they should transfer technology and use our resources.Please discuss some cherished corporate goals that you would like to see CMI attaining in the medium term.
We have already arrived at the critical mass where our growth trajectory is going to begin. We are looking at growing over 60 per cent year on year for the next three years, touching revenues of Rs.1,000 crore by 2020. To this effect, we have already started putting in place facilities that will help us grow at these levels. In the past three months, we have acquired two facilities in Bawal in Haryana and Baddi in Himachal Pradesh. These will be fully functional by the end of this financial year.