2021: The year that was
The year 2021 was quite a challenging one and is ending with a positive note for LEONI Cable Solutions (India). The beginning of the year was fabulous and the expectation was to remain in the same direction, though there were uncertainties hovering around with the news of the second COVID wave in other parts of the world. The plans really went haywire with the second wave, which has disrupted the lives of people, supply chain and spread fear all around. However, Q3 and Q4 have proven to be a great comeback that has helped LEONI India to grow in this difficult year. With all the support from LEONI India employees in operations, sales, supply chain which made an incredible difference in this period, I am proud to see this growth leading to better income for the company.
In 2020 and 2021 CY, LEONI India has worked on various programs and projects in building new products and solutions. We have got close to four new products in the market which are important for domestic and international business. We have received three product certifications in 2021 which helps us to market our products in the export business. At the same time, LEONI India is moving towards its mission of becoming a leading supplier in providing smart data and energy transmission solutions with a new offering in niche markets. In addition to this, LEONI Cable Solutions (India) has been successful in completing two quality systems management certifications, ISO 14001: 2015 & operational health and safety certification of ISO 45001.
2022: The year that will be
CY/FY 2021 was challenging and we have seen growth in domestic markets. Government initiatives to boost various projects in the industrial and infrastructure sector are well received by industry in general and we also witnessed this growth in demand. With the need for process industries growing and the chemical and pharmaceutical sector growing, LEONI India has seen a rising demand. I clearly see that with the COVID situation normalising with the support of vaccines, the domestic market demand is being steady and improving based on the confidence in the government support. On the export side, the demand is improving in Europe, Asia, and the Far East, I clearly see that the situation will remain buoyant in the export markets in 2022 as well.
LEONI India has 90 percent sales through direct sales channel and 10 percent sales through dealer/distributor channel. I see that in 2022 we will increase the share in the indirect channel to 15 percent. In the international market, we are well-positioned too with a healthy and firm relationship with value-added distributors and have a strong connection to grow the business. With clear working and established relationships, LEONI India is increasing its reach within domestic and global markets. For global markets, it needs certifications and approvals for which LEONI Cable Solutions (India) invested in resources and has the required products in order to meet the demand. Being in projects business, project pre-sales & post-sales activities are well structured and we are in a position to have better execution in large project business.
Also Read: LEONI Cable Solutions: The Quality Connection.
Key Trends Driving the Growth
The key trends that I see in the wire and cable business in the industrial space are that the Indian environment is quite buoyant in demand and the supply chain is driving towards a solutions approach. Time, being the essence of most projects, delivery and reliability are the most important factors in order to continue to receive repeat business. Besides this, the industrial business is moving towards new product solutions. Cash is still a challenge in most of the segments on the industrial side. The transport market is seeing increased volume on rolling stocks and the schedule of deliveries will be a challenge with extended payment conditions. Reliability and quality in terms of safety are the top factors driving the transportation market. As the world is getting more and more challenges from the environment and global warming, there is a movement towards greener energy. Solar energy is surely catching up with mega tenders. With the dropping of prices per unit in energy, there is a need for further innovation in this market. Overall, very attractive market conditions and a great demand generation in 2022 are clearly in sight.