A leading company in the domestic power cable segment, Ravin Cables Limited, which set up a joint venture with Prysmian Group some time ago, has an impressive legacy of 65 years. Ravin Group has a strong presence across power and energy sectors and has carved a niche for itself on domestic and global markets as power experts. The Ravin Group comprises various companies that are involved in diverse businesses, such as manufacture of energy cables, EHV cables and installations, solar energy systems, retail energy products and online moisture management systems for transformers. Ravin Group has moved from being a mere manufacturer of cables to being a diversified power-product group.
Ravin Group has recently launched solar cable systems that are designed to meet the growing needs of the solar industry. It has also introduced TRANSEC, a molecular moisture management system designed to continuously remove water from the oil and the paper insulation in a power transformer.
The second week of January 2014 saw the Wire and Cable India team conversing with Mr. Vijay Karia, Chairman and Managing Director, Ravin Group, at Bangalore’s Elecrama 2014.
Here are some excerpts from this engaging interaction.
New Corporate Logo of Ravin Group
Commenting on the company’s new logo, Mr. Karia said, “Actually, this is not a new logo; this is our old logo which we have revived. The colours in the logo stand for the three main pillars of our Group, i.e. sustainability, safety and dependability. We believe that our products should be safe, dependable and sustainable. Some time ago, we had an interaction with our core team, and we arrived at eleven pillars of our values. Our new calendar is based on these values. These values include values such as ethics, affordability, sustainability, trust and dependability. We believe that accessibility, availability and affordability are very important in the Indian context – and this is going to be our motto, which holds good for the new technology we are bringing into the company.”
Speaking about the future plans of his Group, Mr. Karia said, “As you know, Ravin Cables was a joint venture with Prysmian Group, signed in January 2010. We are planning to end this joint venture because of various reasons, including provision of technologies and ethical issues. But Ravin Group will keep launching new products. Some of the products we have launched recently have been showcased at this exhibition. A lot of R&D has gone into designing these products. One of our newly-launched products is what we refer to as ‘colour-changing’ wire or cable. When this wire or cable is subjected to stress in the form of overload or heating, it changes its colour. The important point to note is that this wire changes its colour only when it is under stress. It mimics the human body. You see, when you have a fever, your eyes become red or your nose starts running – signs of illness… . But when the operating temperature is back to normal, the wire or cable regains its original colour. This product is the first of its kind in the world – as far as I know. And it is absolutely home-grown, home-invented. We designed this product without any external assistance.”
Although Ravin Group has recently launched new products, it is in the process of further enhancing its product portfolio. “We have decided upon our product portfolio and the products with which we will be going forward. But let me tell you that these products will be technology-oriented, and yes, wires and cables are very much part of this portfolio” said Mr. Karia.
Commenting on the marketing strategy that Ravin Group has adopted, Mr Karia said, “In India, cables and wires have become commodity products. They need to be de-commoditised. Different companies use different strategies for de-commoditisation. Some of the large companies are building up market shares through a large dealer network. Some of them play on the price, and some of them advertise heavily. We believe in establishing direct communication with customers; we tell them what exactly drives us; for we believe that they are our biggest stakeholders. In any company, customers are the company’s biggest stakeholders. So, your customers should know what you are doing. Communication is something that we constantly try to enhance. We keep the customer posted on new products or services, quality improvement, safety standards and so on. We first disseminate the information amongst ourselves and then amongst our customers.
“Most of the Indian companies are currently engaged in a kind of price war. But that doesn’t sustain; and, like I said, one of our corporate pillars is sustainability. So we do not uphold the price war. As a company, consider yourself alive if after a few decades you are still growing. Look at us – we are a 65-year-old company and we are still growing. Doesn’t this speak volumes of our achievements? It shows that we have done something right. Of course, we have made a few mistakes, but we have learnt from them. We have not stopped growing. We have products allied to this industry. We have some products from the UK, which are essentially molecular sieve moisture removal systems for transformers. We are also in the ‘solar’ area with tracker technology – a kind of technology that enhances, in normal circumstances, the generation of the normal solar cell by almost 35 per cent; and it’s not at 35 per cent of the capital cost. So our ROI has become much better. We have also entered the area of extra high voltage cables and installation. In fact, we have been involved in this kind of work since 2005. We have done a lot of good work in this area, and I’m happy to tell you that in last two days that we’ve spent at this exhibition, three international companies approached us to do their erection jobs in India. There are so many companies that can provide them with the products and services they want, but they chose us.”
Highlighting the issues that today’s wire and cable industry faces, Mr Karia said, “Today’s electrical sector is facing a lot of stress, mainly because of insufficient demand. The lack of sufficient demand has led to an unsavoury price war. This situation is a realistic one. In our country, not only the electrical segment, but also many other local industrial segments are undergoing stress. Take, for instance, the airline segment. The traffic in this segment has grown by leaps and bounds. A huge number of passengers fly in and fly out every day. Yet our airlines are incurring loses. You see, we incur higher costs but we stay away from passing on the increase in cost to customers. If this cost increase is passed on to customers, non-affordability automatically becomes an issue. As a result, in order to at least survive, one starts reducing the price, if earlier one had hiked it. The other day, I was talking to a few winding wire manufacturers. They said that their costs per kilogram – conversion costs of manufacturing – have not changed in the last decade or so despite the fact that labour cost has risen considerably; so have other overhead costs. But manufacturers hesitate to take the increase in cost to the customer. This is particularly true for the wire and cable industry. Manufacturers in our industry are just not able to recover the increase in cost from their customers. Forget recovering the increase in cost; recovering just the cost from the customer is itself a big challenge. Even if the market improves, manufacturers will be too scared to increase the price. If they happen to be getting a small margin, they’ll be happy with just that much.
“I’d like to dwell on three industry-related issues on which we all must focus. First, the whole policy for custom duty and taxation needs to be properly examined, as there is no provision for protection for the local industry in our country. The import duty on PVC today is 7.5 per cent; the import duty on finished cables is 7.5 per cent. The duty drawback on aluminium conductor in percentile is much more than what it is on cables. All import duties on raw materials for cables are 5 to 7.5 per cent. However, duty drawback on cables is 1.8 per cent. Now, how can we be competitive on the international market? The government’s policy is rather skewed and short-sighted. We need to improve the capital infrastructure if we want to create demand – a kind of demand that lasts for a decade or two. Six-monthly policies or yearly policies will just not work. Certainly, the capital spent on infrastructure needs to go up considerably.
“Second, we need to protect the local industry. Local industry means the Indian local industry. I am not referring to foreign multinationals that have 100 per cent FDI. Multinational companies do not need protection because they have deep pockets… . If you want to open a company in the Middle East, you have to have a local with 51 per cent partnership. You cannot open a company in China without local partnership. Why does India allow 100 per cent FDI in these areas? In today’s Indian cable industry, a $100 million capex for setting up a plant with decent technology – top-of-the-line technology – would translate into revenue of $1 billion per year. Out of these one billion dollars, one would easily be able to earn $100 million in the first year itself. So, the foreigner who is putting $100 million will take out that amount of money in the first year, and then for the next 25 years he would be taking Indian money out of the country. Why don’t we support the local people in setting up industry and why don’t we give them access to technology?
“Third, we need to give a boost to research and development. In the ongoing price war, R&D has taken a backseat. Fortunately, Ravin has recently invested a lot in R&D in two areas, namely scratch-proof cable and colour-changing cable. These products are absolutely home-grown. So as you can see we have been 100 per cent successful in launching new products. The will to launch new products should be stronger in our industry. We must not say that only foreigners can design new products. And we need to realise that these foreigners are only interested in making money in India. They are not here for the love of the land. In fact, most of the foreigners I have met find India to be a very difficult country to work in… . There is a lot of talk of cartelisation in the country. Cartelisation is happening in most of the large projects – even in the electrical segment. This means that the country will be paying more and more. So, encourage the local people; encourage the local industry. Many Indians are ruling the roost in many countries, but they cannot do so in their own country. I guess, it has to do with our mentality. If a foreigner markets a product in India, the product is well accepted, but if an Indian markets a product, the product is not accepted well. We need to change this mindset.”