“Our target is to make exports as at least 25% of our revenue in the next two years.”
Excerpts of the interview with Mr. Vipul Nagpal, Founder & Managing Director, Orient Cables (India) Private Limited:
Challenges to reckon with:
The biggest problem faced by the industry is the massive and unnatural increase in raw material prices in the last six months which seems to be continuing with no respite. This has added a lot of unproductive overhead on businesses, not only wires and cables, but I reckon any business worldwide that consumes metals and plastics. Justifying new prices to customers, managing increased working capital, customer churn, fluctuation in stream of orders, forceful discounts to retain customers, are various issues industry is dealing with and will continue in the next 6-12 months if the prices don’t stabilize.
Slow infrastructure development and construction activity is also responsible for a muted demand which I hope should improve as the economy limps back to growth.
Expectations from the Government:
There are three areas the government should focus on to help the industry. First and foremost, it is the rationalization of import duties, for instance, some products that we manufacture have come under an inverted duty structure since the last union budget announced in Feb 2020. This implied that it is cheaper to import finished goods than to import raw materials to manufacture it. This is hurting the demand and bottom lines and it may lead to closure of manufacturing of this product in India entirely. We have taken up this issue along with other manufacturers to the Ministry of Electronics and Information Technology (MEITY) and the Department of Telecommunications (DOT) and we hope to get a hearing and resolution on this subject soon.
Secondly, it is quite sensible to go ahead with the planned infrastructure projects and resume with the stalled ones. The government’s spending can cause a significant boost in the economy of the country.
Finally, it is a sincere request to the government to keep the taxes low, and do not introduce any more taxes in the upcoming budget. To sum up, it can be said that bold decisions are needed. Let more money be in the hands of the consumers. In fact, the taxes will eventually come from indirect tax route when the overall spending power improves.
“We are inspired by the PM’s dream of ‘Bharat’ which is not only ‘Atmanirbhar’ per se, but also emerge as a reliable and resilient supply base to other nations.”
Strategies to strengthen the economy post-COVID:
We have started to actively look at export markets post-COVID. And the world is also looking at India as an alternative to China. Our target is to make exports as at least 25% of our revenue in the next two years. We are inspired by the PM’s dream of ‘Bharat’ which is not only ‘Atmanirbhar’ per se, but also emerge as a reliable and resilient supply base to other nations.
Fast forward to 2021 – the way ahead:
There have been different levels of demand in different verticals post-COVID. So, we plan to expand in areas which are showing promise and hope to increase our bottom line growth through that. We are also strengthening our customer support and retention and focusing on new customer acquisitions. Also, due to rising input costs, we plan to undertake some strong initiatives towards backward integration into manufacturing some key raw materials in order to control costs and streamline supplies.