KEC has recently ventured into EHV segment (220kv and 400kv) with the investment of Rs. 175 crores. Team WCI interacted with Mr. Nikhil Gupta, ED- Cables, RPG Cables (A division of KEC International Ltd.) to capture the glimpse of the post production plans of the company and their targets. Excerpts
Wire & Cable India: The brand name ‘Asian’ recently marked its 50 glorious years of existence. How has been the journey so far?
Nikhil Gupta: The Asian brand came into existence in 1960 and since then it has been a pioneer in cable manufacturing. The brand was the first to introduce XLPE insulation technology in India and has stood for quality and performance. RPG Cables, after acquiring the Asian brand in 1997, has since then become one of the biggest players in the cable market with a wide product portfolio including LT, HT, EHV, Instrumentation, Control, Telecom and Turnkey solutions.
WCI: Tell us about your EHV project.
NG: We have entered into extra high voltage (EHV) cable business by setting up a production facility in Vadodara, Gujarat. The plant entails an investment of Rs 175 crore and will start production by June this year. EHV cables have a growing market and we are one of the early entrants in this segment. These cables are technologically cutting edge and the market pays a premium for these products which will enhance our bottom-line as well as the top-line. At peak output, the unit will contribute Rs 350 crore to KEC’s top-line. With this venture we will expand our product portfolio to 220 kv and 400 kv EHV cables. The new plant is built on strong fundamentals of quality, safety and performance. The world class facility comprises state-of-the-art machinery and technologies, contemporary people practices and robust systems and processes to deliver value to the customer. The Vadodara plant will mainly target the growing EHV market within India; while simultaneously catering to the export market especially in Africa. The percentage share of domestic sales will be approximately 80-85%.
WCI: The vision of becoming among the top 3 cable companies in India will require a definite strategy. Kindly elaborate?
NG: Over the last 5 years the company has grown at a CAGR of over 30% which is much higher than the market, thereby steadily increasing our market share. We have laid down a roadmap for achieving our vision and the expansion of HT & EHV capacity at Baroda is one of the key steps to achieving the vision. We are looking at exploring new avenues such as niche products, increased presence through channel sales and the sizeable export market. We are looking at various such initiatives to grow our top and bottom line while ensuring that our growth is aligned with our vision of being the preferred partner for all our stakeholders.
WCI: “We are bullish about future” going forward what are the future plans of RPG cables for the coming year?
NG: The cables business achieved an annual turnover of approximately Rs. 582 crores in FY 2011-12. We currently have an order backlog of approximately Rs. 150 crores with exports to over 11 countries. We are targeting a growth of approximately 25% with greater penetration in the export market. We will be focusing on the premium EHV segment which will bring in higher margins.
WCI: Wire & cable industry in India is quite unorganized. According to you what are the areas of improvisations that needs to be addressed?
NG: One of the major concerns for the customer in the cable industry is lack of quality and by extension supplier credibility. The unorganized market is highly cost conscious, often compromising on quality as well as human safety in manufacturing. We as one of the industry leaders are aware of this and work on creating opportunities to increase awareness among customers about product quality, best practices for use and finding customized solutions for their requirements. Plant safety is one of the key pillars of our performance and we educate customers about this by inviting them for plant visits.