“By putting more thrust on exports, we are now expecting to see about 40% of our revenue to be generated from exports.”
Excerpts of the interview with Mr. Vijay Kumar Bajaj, COO, Apar Industries Limited (Unit-Uniflex Cables):
Challenges to reckon with:
In the first few months, the lockdown related to the pandemic and its partial lifting has been difficult for the country in the ‘new normal’ conditions. While it has taught all of us to follow hygienic, simple, and healthy lifestyle, and maintain social distancing, this ensuing time period has also helped digital transformation, and started the shift to remote working (work from home) etc. The demand has been lower and the surplus capacity situation has led to a highly competitive environment thereby leading to enhanced productivity. The April-September 2020 period saw lower business volumes by almost all the cable manufacturers and most of them reported losses. This has affected financial health and cash flow for most of them. Although the government had introduced several financial measures to tide over the pandemic situation, it had to spend more on the defense sector and hence it was left with little money to spend on the infrastructure, and other projects.
By and large, the impact of all this – the government’s last spending on the pandemic management, new vaccination programs, and higher defense allocation is likely to constrain the government to continue with reduced spending on infrastructure and other projects. However, the private sector’s ongoing projects are expected to get expedited to make up for the lost time. Some of the sectors like – solar power & wind mill, pharmaceutical, steel, cement, defense, railways, etc. are expected to become stronger. At present, exports are a major focus of the cable industry as there is a lot of anti-China sentiment globally and Indian products can fill in the gap.
Expectations from the Government:
The industry expects the government to bring liberal policies on RoDTEP (MEIS), lower bank interest rates and enhanced financing limits to the industry that will enable it to take advantage of the current favorable situation in the international market for increased exports. The prices of some of the commodities like steel and polymers have gone through the roof taking advantage of the current discouraged imports from China; the government can put some checks on them so that they are not able to take any undue advantage of the current situation.
The government can push for more projects in renewable energy, defense, railways and infrastructure development to generate further demand.
“The industry expects the government to bring liberal policies on RoDTEP (MEIS), lower bank interest rates and enhanced financing limits.”
Strategies to strengthen the economy post-COVID:
Yes, the pandemic has certainly presented us with an opportunity to re-strategize, and build a diverse and resilient economy. The government is giving lots of encouragement in this regard. Apar Industries has had a long association with the DRDO and have developed several import substitution items in the past, and now, we are looking at developing many items for defense as the government is giving major policy-thrust to Atmanirbhar Bharat.
Similarly, we are developing a few more specialty items of import substitute. By putting more thrust on exports, we are now expecting to see about 40% of our revenue to be generated from exports.