Making wires and cables market success story

 The new government, the new policies, the “Make In India’ initiative, and a mission to make India the choice for the production of electrical equipment and reach an output of $100 billion by balancing exports and imports, the wires and cables market is in a such position from where success is just a step away.
Growing wires and cables marketThe industrial and commercial segment is an important aspect for the growth of wires and cables market. “Wire and cable business growth is linked to power and infrastructure segment growth,” remarks Anil Krishna, Vice President, Borouge (India) Pvt. Ltd. “With auctioning of coal blocks to power producers, the sector is likely to show double digit growth for next 3-4 years.”
Industrial production grew at the rate of 3.2 per cent YoY in the past 3 months which seems to be on a lower side, considering the sentiments shown by SENSEX recently. “Current sentiments and capital market movement speak volumes of growth destined to hit India in years to come,” explains Himanshu Sharma, Sales Head – Industries & Contractors; OEMs, Railway, Hydrocarbon, Generation and SAARC; Energy Products Division; Raychem RPG. “The government will ensure to turn the recent cyclical recovery into a sustained boom. We are benefiting hugely from a worldwide slump in energy prices. Consumer-price inflation has come down to 5.1 per cent and current account deficit has shrunk with rupee being stable even under pressures.”
With this Raychem is bound to get good capital for structural reforms for which people of India have given powerful mandate to Modi Government. “I am sure next 5 years will be a transformational era and we should see industrial segment growing at an average of more than 7 per cent,” opines Mr Sharma. “With this we should see a rebound in cable industry in Q3-Q4 of FY16 at the rate of more than 15 per cent YoY.”
However, Nikhil Gupta, Executive Director – Cables, KEC International Ltd., sounds little cautious. His reason is that large part growth across manufacturing and infrastructure sector has been subdued. He adds, “Market sentiments have improved largely due to falling commodity prices but we are yet to see a turnaround. At the same time, the government has promised investment in railways, ports, smart cities renewable generation and distribution amongst others. This bodes well for cables market and we can expect it to grow annually at 10-12 per cent.”
Concern of growing importsImports have captured about 43 per cent of the market for electrical components in India. No doubt, it is a matter of serious concern. Wire and cable business is different than electrical component business, and imports come due to global competition in big power generation and distribution projects. “For high-voltage cables, Indian manufacturers need government support perhaps in the form of duty exemption on imported raw material as there is no local supplier,” remarks Mr Krishna. “However, for low-voltage cables, India has adequate capacity and expertise.”
The time has come for the industry to raise the quality standards so that end users should prefer local products rather than cheap imports.
According to Mr Gupta, “Imports have historically been higher in power equipment space, but cables import was around $800 million in 2014 while market is around $5 billion which places it at 18 per cent. Moreover, most of the imports have been in wire space apart from specialized cables coming from Thailand, Korea and Germany.”
Raychem tends to gain with global competition coming in by benchmarking and ensuring competitive productivity levels. “Low cost of imported equipment ensures decent ROI and low initial investments,” explains Mr Sharma.
Many big players like ABB and Siemens are now localising their electrical components to remain competitive in the market which in turn is helping domestic industry.
Technological trends in the marketThe market is moving towards smart solutions and reducing human intervention. According to Mr Sharma, “The convergence of efforts towards minimising human errors and controlled energy consumption will emerge into new products which will revolutionise electrical industry. The government’s efforts towards renewable energy are taking centre stage and bound to become a success.”
While talking about the technological trends, Mr Krishna says that with growing energy demand and urbanisation, there is urgent need to overhaul India’s power distribution system. He also discuss about moving towards underground cables for safety and security reasons. Demand for high-voltage cables is picking up with growing energy demand and coming up of ultra-mega power projects. For solar and wind energy sectors, special high-voltage DC cables are required too.  
Mr Gupta  believes that producing good quality cables that meet standards is a challenge in India and focus will need to be lean manufacturing and tighter process control. He adds, “In EHV cables, we recently manufactured 220 kV, 2,000-sq.-mm. cable which is largest ever in India. As power requirements of urban areas increase, there will be demand for such large size cables to deliver bulk power reliably.”
Taking businesses to next levelWhat is the prime factor to take any business to the next level? Raychem RPG firmly believes in providing innovative products embedded in solution based value propositions. Mr Sharma says, “We initiated comprehensive sales training programme for the team to equip them to understand and deliver value propositions in marketplace. We also ramped up our services team with latest tools and training to enhance customer experience. There is a process in place through which we promptly brainstorm voice of the customer and come out with value-based propositions.”
In order to bolster growth, Borouge has set up a LDPE plant of 3.5-lakh tonnes which is the base resin to make XLPE grades needed for cable insulation. With capacity to produce more than 1.5-lakh tonnes of cable grades, Borouge will be one of the major players in Asia for cable business.  
For KEC International, next growth will come from EHV and from new products. In EHV, the company has already 220kV KEMA type test certificate and is well positioned to cater to the increasing demand. At the same time, KEC International is looking to innovate and introduce customised products to suit local requirements.
Mission 2012-2022The Indian Government has made an ambitious plan. According to their Indian Electrical Equipment Industry Mission Plan 2012-2022, the government has planned to make India the country of choice for the production of electrical equipment and reach an output of $100 billion by balancing exports and imports. “For this we have to see how far government is able to implement the industry friendly policy,” says Mr Krishna. “Starting from making land and infrastructure available for industry to be set up, single window clearances, labour law reforms, taxation policy all needs to be updated to meet global competition. In a democratic country like India, implementation and execution is always a challenge.”
For “Make in India” initiative to succeed, as Mr Gupta describes, the government must make it easier for people to do business here and the decisions must be fast-tracked. He adds, “We must match the speed of development in other fast-growing economies like China and hence push has to be towards competitiveness and global benchmarking.”
Mr Sharma seems very optimistic and talks about innovation and believes that innovation has to play a big role in achieving exports target of $23 billion by 2022 as we must get first mover advantage to reap benefits in this competitive industry. The government should also support or rather subsidise innovation in power sector to make the Indian power industry a super success story.
___________________________________For high-voltage cables, Indian manufacturers need government support perhaps in the form of duty exemption on imported raw material as there is no local supplier.Anil Krishna, Vice President, Borouge (India) Pvt. Ltd.__________________________________________
Market sentiments have improved largely due to falling commodity prices but we are yet to see a turnaround.
Nikhil Gupta, Executive Director – Cables, KEC International Ltd      ___________________________________________
Low cost of imported equipment ensures decent ROI and low initial investments.
Himanshu Sharma, Energy Products Division, Raychem RPG________________________________________________

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Making wires and cables market success story

 The new government, the new policies, the “Make In India’ initiative, and a mission to make India the choice for the production of electrical equipment and reach an output of $100 billion by balancing exports and imports, the wires and cables market is in a such position from where success is just a step away.
Growing wires and cables marketThe industrial and commercial segment is an important aspect for the growth of wires and cables market. “Wire and cable business growth is linked to power and infrastructure segment growth,” remarks Anil Krishna, Vice President, Borouge (India) Pvt. Ltd. “With auctioning of coal blocks to power producers, the sector is likely to show double digit growth for next 3-4 years.”
Industrial production grew at the rate of 3.2 per cent YoY in the past 3 months which seems to be on a lower side, considering the sentiments shown by SENSEX recently. “Current sentiments and capital market movement speak volumes of growth destined to hit India in years to come,” explains Himanshu Sharma, Sales Head – Industries & Contractors; OEMs, Railway, Hydrocarbon, Generation and SAARC; Energy Products Division; Raychem RPG. “The government will ensure to turn the recent cyclical recovery into a sustained boom. We are benefiting hugely from a worldwide slump in energy prices. Consumer-price inflation has come down to 5.1 per cent and current account deficit has shrunk with rupee being stable even under pressures.”
With this Raychem is bound to get good capital for structural reforms for which people of India have given powerful mandate to Modi Government. “I am sure next 5 years will be a transformational era and we should see industrial segment growing at an average of more than 7 per cent,” opines Mr Sharma. “With this we should see a rebound in cable industry in Q3-Q4 of FY16 at the rate of more than 15 per cent YoY.”
However, Nikhil Gupta, Executive Director – Cables, KEC International Ltd., sounds little cautious. His reason is that large part growth across manufacturing and infrastructure sector has been subdued. He adds, “Market sentiments have improved largely due to falling commodity prices but we are yet to see a turnaround. At the same time, the government has promised investment in railways, ports, smart cities renewable generation and distribution amongst others. This bodes well for cables market and we can expect it to grow annually at 10-12 per cent.”
Concern of growing importsImports have captured about 43 per cent of the market for electrical components in India. No doubt, it is a matter of serious concern. Wire and cable business is different than electrical component business, and imports come due to global competition in big power generation and distribution projects. “For high-voltage cables, Indian manufacturers need government support perhaps in the form of duty exemption on imported raw material as there is no local supplier,” remarks Mr Krishna. “However, for low-voltage cables, India has adequate capacity and expertise.”
The time has come for the industry to raise the quality standards so that end users should prefer local products rather than cheap imports.
According to Mr Gupta, “Imports have historically been higher in power equipment space, but cables import was around $800 million in 2014 while market is around $5 billion which places it at 18 per cent. Moreover, most of the imports have been in wire space apart from specialized cables coming from Thailand, Korea and Germany.”
Raychem tends to gain with global competition coming in by benchmarking and ensuring competitive productivity levels. “Low cost of imported equipment ensures decent ROI and low initial investments,” explains Mr Sharma.
Many big players like ABB and Siemens are now localising their electrical components to remain competitive in the market which in turn is helping domestic industry.
Technological trends in the marketThe market is moving towards smart solutions and reducing human intervention. According to Mr Sharma, “The convergence of efforts towards minimising human errors and controlled energy consumption will emerge into new products which will revolutionise electrical industry. The government’s efforts towards renewable energy are taking centre stage and bound to become a success.”
While talking about the technological trends, Mr Krishna says that with growing energy demand and urbanisation, there is urgent need to overhaul India’s power distribution system. He also discuss about moving towards underground cables for safety and security reasons. Demand for high-voltage cables is picking up with growing energy demand and coming up of ultra-mega power projects. For solar and wind energy sectors, special high-voltage DC cables are required too.  
Mr Gupta  believes that producing good quality cables that meet standards is a challenge in India and focus will need to be lean manufacturing and tighter process control. He adds, “In EHV cables, we recently manufactured 220 kV, 2,000-sq.-mm. cable which is largest ever in India. As power requirements of urban areas increase, there will be demand for such large size cables to deliver bulk power reliably.”
Taking businesses to next levelWhat is the prime factor to take any business to the next level? Raychem RPG firmly believes in providing innovative products embedded in solution based value propositions. Mr Sharma says, “We initiated comprehensive sales training programme for the team to equip them to understand and deliver value propositions in marketplace. We also ramped up our services team with latest tools and training to enhance customer experience. There is a process in place through which we promptly brainstorm voice of the customer and come out with value-based propositions.”
In order to bolster growth, Borouge has set up a LDPE plant of 3.5-lakh tonnes which is the base resin to make XLPE grades needed for cable insulation. With capacity to produce more than 1.5-lakh tonnes of cable grades, Borouge will be one of the major players in Asia for cable business.  
For KEC International, next growth will come from EHV and from new products. In EHV, the company has already 220kV KEMA type test certificate and is well positioned to cater to the increasing demand. At the same time, KEC International is looking to innovate and introduce customised products to suit local requirements.
Mission 2012-2022The Indian Government has made an ambitious plan. According to their Indian Electrical Equipment Industry Mission Plan 2012-2022, the government has planned to make India the country of choice for the production of electrical equipment and reach an output of $100 billion by balancing exports and imports. “For this we have to see how far government is able to implement the industry friendly policy,” says Mr Krishna. “Starting from making land and infrastructure available for industry to be set up, single window clearances, labour law reforms, taxation policy all needs to be updated to meet global competition. In a democratic country like India, implementation and execution is always a challenge.”
For “Make in India” initiative to succeed, as Mr Gupta describes, the government must make it easier for people to do business here and the decisions must be fast-tracked. He adds, “We must match the speed of development in other fast-growing economies like China and hence push has to be towards competitiveness and global benchmarking.”
Mr Sharma seems very optimistic and talks about innovation and believes that innovation has to play a big role in achieving exports target of $23 billion by 2022 as we must get first mover advantage to reap benefits in this competitive industry. The government should also support or rather subsidise innovation in power sector to make the Indian power industry a super success story.
___________________________________For high-voltage cables, Indian manufacturers need government support perhaps in the form of duty exemption on imported raw material as there is no local supplier.Anil Krishna, Vice President, Borouge (India) Pvt. Ltd.__________________________________________
Market sentiments have improved largely due to falling commodity prices but we are yet to see a turnaround.
Nikhil Gupta, Executive Director – Cables, KEC International Ltd      ___________________________________________
Low cost of imported equipment ensures decent ROI and low initial investments.
Himanshu Sharma, Energy Products Division, Raychem RPG________________________________________________

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