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Indian cable manufacturing technology is highly matured

Venugopal Pillai ,  Monday, April 25, 2011, 11:46 Hrs  [IST]

V.K. Bajaj.jpg— V.K. Bajaj, Chief Operating Officer, Uniflex Cables Ltd

Uniflex Cables Ltd, a subsidiary of Apar Industries, is a leading name in the field of power and telecom cables. Uniflex is known for introducing innovative cabling solutions for both the domestic and international markets. In this exclusive interaction, V.K. Bajaj dwells on a number of issues relating to his company and the power cables industry. With increasing private enterprise in the power sector, the power cables industry is poised for dynamic growth, he feels. An interview by Venugopal Pillai.

Private sector entities have started playing a prominent role in the field of power generation, transmission and distribution. What impact do you see this having on the power cables industry?
The power sector—generation, transmission and distribution—so far had been in the hands of state and Central government utilities and we have all seen that capacity utilizations have been low, transmission losses (technical and due to pilferage) have been significantly high, and distribution not as efficient as it should be. Much renewed effort has been made to improve the performance in these sectors by restructuring of SEB's and results are improving.

Private sector entities are working hard by deploying better practices and better quality products. The private sector procurement, especially of cables, is from reliable and qualityconscious cable manufacturers with stricter inspection and warranty norms. This has certainly helped good quality conscious manufacturers to offer quality products.

Leading cable manufacturers have certainly benefited by limiting competition to manufacturers who have reliable manufacturing systems, use of quality raw materials and newer design of cables.

Untitled - 33.jpgHow has Uniflex benefited after it became a subsidiary of Apar Industries?
Uniflex Cables has been an old and established player. However, during the jelly-filled telephone cable (JFTC) boom, it had put all its resources on JFTC. When the demand of JFTC declined, it landed up in a difficult financial situation. That is how Apar stepped in during mid-2008. Since then, Apar has established a new management team, invested for capacity enhancement and capacity debottlenecking and provided all assistance in working capital. Apar is also providing marketing support for export market.

Please summarize some corporate objectives that you would like to see Uniflex Cables attaining in the next 5-7 years?
Uniflex sales during last three years have grown exponentially from Rs.jpg100 crore to Rs.jpg300 crore in a short time. We expect to maintain high growth in coming years by offering new products and increasing our exports. Apar has plans to invest further in new cable products, which is expected to take Uniflex sales to Rs.jpg1,000 crore in next five years.

What has been the market response to Uniflex's "anti-theft" cables launched last year?
We have been exporting our anti-theft cables to countries in the African region. In India, we are currently running a few pilot projects for private distribution companies. Once these pilot projects are successfully accepted, we will have good demand generated in India.

Untitled - 34.jpgOver the past few years, we have noticed that leading cable manufacturers in India are tying up with multinationals for EHV cables. Does Uniflex have plans in this direction?
The power cable market has lot of surplus capacity worldwide. Since most of these international cable manufacturers are facing demand problems in their own countries, many of them are trying to set up base in India to be part of India's growing demand for HV/EHV cables. We feel that the margins in power cables are expected to remain under pressure. Therefore, we are not too keen at present to invest in EHV cable segment.

Over the years, have you noticed any change in the tendering and procurement policies of state government utilities?
There is a growing pressure for bringing in transparency into procurement process. The tendering and procurement policies are undergoing changes with e-bidding and reverse auctions now being followed by several utilities. It is certainly benefiting the utilities though it is putting pricing pressures on cable manufacturers.

Please summarize the capacity expansion plans of Uniflex, in the field of power and industrial cables , excluding telecom .
We have been gradually increasing our capacities in line with a fast growth that we achieved from Rs.jpg100 crore to Rs.jpg300 crore in the last three years. This has been so far achieved by de-bottlenecking and modernization of equipment. There is still some room by following this strategy and we have already created capacity up to Rs.jpg450 crore. We are in the process to set up an Electron Beam Irradiation Curing for our Elastomer cables besides having plans to enter automotive cables and building wire segment. The capacity for anti-theft cables, aerial bunched cables and speciality cables is planned for increase to achieve our objective of Rs.jpg1,000 crore sales in the next five years.

Untitled - 35.jpgYou have been advocating the cause of fire survival cables to minimize the risk of fire from electrical short circuit. Do you feel real estate developers and other stakeholders are getting aware of the need of FS cables?
We were perhaps the first to get our fire survival building wire tested at ERDA and introduced it in the urban building market. Unfortunately, there are no statutory or regulatory directives for compulsory use of such wires in the commercial segment. So we have decided to remain low at present. We do not want to be spending too much time on concept-selling as we have many other priorities.

Speaking of industrial cables (non-power related), which sectors would be major growth drivers for Uniflex Cables?
Traditionally, only 50 per cent of the cables are sold to utilities and power sector, the remaining goes to infrastructure, railways, shipping, steel, cement, sugar, petrochemical and other sectors. The infrastructure, petrochem and metro railway segment are the prime sectors that are witnessing very high rate of growth. Uniflex intends to make more inroads into these sectors. Uniflex has several specialty products especially for steel and defence sector and will try to improve position.

Untitled - 36.jpgDo you see the Indian power cable industry getting globally competent? How do you gauge the future for the Indian power cable industry in the medium-to-long term?
The cable manufacturing technology is highly matured in India and is highly competitive to take on the world. We have been able to export over Rs.jpg100 crore cables against stiff competition from Chinese and East European block countries. In fact, it is observed that even in international tenders, the competition is with other Indian companies. Availability of raw materials, cheaper labour and good equipment has made the Indian cable manufacturing very competitive.
 
                 
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