Leading manufacturer of electrical and telecommunication cables with a turnover in excess of about USD 500 million, Finolex Cables, has announced plans to enhance 50 percent capacity expansion in automobile wire production by October 2024, with manufacturing capabilities reaching 87,000 km/month, along with a capex of INR 500 crore in the next 18-24 months. This was revealed by Mr. Amit Mathur, President, Sales & Marketing, Finolex Cables Limited, during an interaction with Wire & Cable India.
Wire & Cable India: Finolex Cables has become a household name in India. Please share your business journey, starting from July 1945 till date. Please share details about the major milestones and achievements, and about you entering the wires and cables segment.
Amit Mathur: In 1958, we started as an SSI unit, manufacturing PVC-insulated cables for the automobile industry. The Chhabria family’s roots in Pune trace back to 1945, when Mr. PP Chhabria and Mr. KP Chhabria set up a small shop selling electrical wires and cables. The decisive moment came in the mid-1950s with a significant order from the defence department for wire harnesses, propelling into cable manufacturing. The year 1972 marked a transformative step as Finolex Cables became a limited company. Following a public offering in 1983, the company embraced a continuous expansion journey, becoming India’s largest and most diversified cable manufacturer.
WCI: Please share details about the infrastructure and manufacturing setup of your modern state-of-the-art plants set up in Pune, Goa, and Roorkee. Kindly provide details about your manufacturing capabilities also.
AM: Finolex Cables boasts of state-of-the-art manufacturing facilities across five sites in Goa, Pune and Roorkee. Our infrastructure is a testament to our commitment to deliver the highest quality cable and wire products. We specialize in producing high-quality, light-duty PVC insulated electrical cables and power & control cables. These cables find applications in various sectors, including industrial establishments, consumer durable goods, automobiles, agricultural pumps, and small generators. Currently, our focus is on a significant capex program of INR 500 crore, scheduled over the next 18-24 months.
This program aims to enhance our manufacturing capabilities, particularly in automobile wire production using state-of-the-art European machines, with a 50 percent capacity expansion at our Urse, Pune and Roorkee, Uttarakhand facilities. By October 2024, we anticipate reaching a total automobile wire manufacturing capacity of 87,000 km/month, up from the current 59,000 km. This expansion aligns with our revenue generation strategy, with approximately 64 percent coming from electrical wires & cables and 10 percent from communication cables. The capex program positions us to meet the increasing demand in the automobile wire sector.
Along with electrical wires, FCL is also looking to expand its communication cable business. Keeping in mind the growing demand for optic fibre cables (OFC) in view of the 5G roll-out all over the country and the fibre-to-home requirement, FCL has decided to expand its range and capacity in optic fibre cables. At present, the company has a fibre drawing capacity of 4 million fibre km per year and cabling capacity of 8 million fibre km per year. The company is also investing in backward integration to manufacture glass preforms, used for drawing fibre in the towers. Till now, the company has been importing these glass preforms, which are drawn to make glass fibres. Once the company starts making them, it will be the second company to manufacture glass preforms in the country. With this expansion, the preforms capacity will increase to 4 million fibre km per year; the draw tower capacity will reach 8 million fibre km per year and fibre optic cables will increase to 10 million fibre km per year.
We at Finolex Cables are setting up an electron beam facility by installing two electron beam machines – one with 1.0 MeV and the other with 1.5 MeV capacity. This will enable the company to manufacture a wide range of wires and cables using radiation technology and launch products with temperature ratings of up to 150 degrees centigrade and improved environmental & abrasion resistance properties. As a result, the company is planning to manufacture and sell a range of solar cables, high-end electrical wires for housing applications, as well as instrumentation cables for railways, especially in regions where high-speed trains are being launched.
WCI: Share some details about your commitment to quality, along with all the related certifications.
AM: Our commitment to quality is exemplified by our plants receiving TL:9000, ISO 9001, ISO 14001, ISO 45001, ISO 27001 Quality Management Systems Certifications. These certifications not only underscore our dedication to stringent quality standards, but also bolster our credibility in the market. Customers and stakeholders can trust in the reliability of Finolex Cables products, setting us apart in a competitive industry.
WCI: Finolex Cables had last year allocated a capex of INR 200 crore to enhance its manufacturing capabilities at Urse, Pune. Please share details about the plan.
AM: In line with our strategic vision, we have allocated INR 200 crore for a capex program at our Urse, Pune plant. This investment is not just about expansion but also a strategic move to enhance our manufacturing capabilities. The focus on solar cables, automotive components, and optical fiber reflects our commitment to staying ahead of market trends. The utilization of advanced technologies like controlled electron e-beam technology positions us to produce high-quality solar cables and contribute meaningfully to the solar power industry.
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WCI: What is the USP of Finolex Cables? How do you manage to maintain your position as one of the leading manufacturers of electrical and telecommunication cables in India having a turnover of USD 400 million?
AM: As Finolex Cables, our USP lies in a multifaceted approach. Our emphasis on customer service, production of high-quality PVC insulated electrical cables, power, and control cables, and diversification into lighting products, electrical accessories, switchgear, fans, and water heaters, contribute to our resilience and market position. Our wide distribution system across India, coupled with extensive marketing efforts, ensures our brand is a household name.
At Finolex we believe in consistent investment in the areas of product development, brand visibility, distribution network, and technology infrastructure to lay the foundation of our competitive advantage. Thus, enabling us to capitalize on emerging opportunities and take the organization to greater heights. Going forward the company will continue to aggressively expand its capabilities and capacities, widen its retail footprint, enhance its brand appeal and customer engagement to augment our market positioning and sustain consistent growth.
WCI: Please share information about the R&D capabilities of Finolex Cables. Kindly give details on the recent advancements or innovations in your product lines and services catering to wires & cables.
AM: In the realm of research and development, Finolex Cables has been steadfast in driving innovation across various segments of the wires and cables industry. Our R & D initiatives have yielded significant advancements in product design and development, addressing specific market needs. Noteworthy achievements include the introduction of new products in the auto cables category, with a focus on AVSS and CIVUS (Compressed Conductor Ultra-Thin Wall Vinyl Insulated Low-Voltage Cables for Automobiles), tailored to niche customer specifications.
Furthermore, we have expanded our portfolio to include CAT6A and CAT6 FTP products, recognising the growing demand for high-performance data transmission solutions. Also for outdoor application, we have introduced CAT6 double sheathed cable as well as corrugated ECCS tape (electro chrome coated steel tape) armoured cable. Additionally, our commitment to market responsiveness is evident in the development of economy-class CCTV cables, aligning with the evolving requirements of this segment.
To enhance our capabilities, we’ve invested in a new electro tin plating line, aimed at meeting the demands in photo voltaic solar cables, instrumentation/control cables, special cables and auto cables up to 150°C sustainability.
The introduction of variants in EV charging cables for both AC and DC categories underscores our proactive approach to catering to the rising needs of electric vehicles. Our R&D team remains dedicated to continuous innovation, striving to develop new cable types that align with niche market demands. The benefits derived from these R & D efforts are multifaceted, ranging from improved product quality to enhanced end-user performance and a noteworthy contribution to import substitution.
“The global wire and cable industry, which was valued at USD 213.6 billion in 2022, is expected to reach USD 323.8 billion by 2032, representing a compound annual growth rate of 4.6 percent.”
WCI: Kindly share your views regarding the challenges being faced by the Indian cable & wire industry. What should be the role of the Indian government in the growth of this sector?
AM: Despite the robust growth experienced by the Indian cable and wire industry over the past five years, it is not without its challenges. As the government focuses on providing power to all and housing market recovery, the industry’s potential growth is evident, with a projected USD 1.65 billion increase during 2021-2025. However, challenges persist, including the need to keep pace with technological evolution, navigate complex regulatory landscapes, and contend with intense market competition. The government’s role is instrumental in addressing these challenges and fostering sustained industry growth. Investments in infrastructural projects contribute significantly to the demand for cables, creating a robust market for industry players.
A stable and supportive regulatory environment is crucial, providing the necessary framework for innovation and ensuring compliance. Skill development initiatives supported by the government play a vital role in cultivating a competent workforce capable of navigating technological changes, contributing to the industry’s resilience. Furthermore, the promotion of research and development through incentives encourages innovation, reinforcing the industry’s global competitiveness.
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WCI: What are your long-term goals for the growth of Finolex Cables? Where do you see your company after 5 years?
AM: Looking ahead, our long-term goals at Finolex Cables are ambitious. With a committed capex of around INR 500 crore and foraying into the Fast-Moving Electrical Goods (FMEG) sector, we aim to achieve a revenue target of approximately INR 10,000 crore in the next 4-5 years. This strategic vision positions us as a dynamic player, ready to adapt to market changes and drive sustained growth.
“With a committed capex of around INR 500 crore and foraying into the Fast-Moving Electrical Goods (FMEG) sector, we aim to achieve a revenue target of approximately INR 10,000 crore in the next 4-5 years.”
WCI: Please give details about your market footprints and major clients for the wires & cables segment.
AM: Finolex’s industrial cables have been the market leader for almost 50 years, with an astounding 22 percent organized market share. Our dedication to exceptional quality, verified performance, and vertical integration through in-house production of essential components such as compounds and copper rods distinguishes us. This strategy allows us to achieve a fantastic EBITDA margin of 15.5 percent in FY23, above industry standards. Our key clients from many industries, drawn to our dependability, strengthen Finolex’s position as the preferred choice in the electrical wires and cables market.
WCI: What are the current global market trends in the wire & cable industry?
AM: The global wire and cable industry, which was valued at USD 213.6 billion in 2022, is expected to reach USD 323.8 billion by 2032, representing a compound annual growth rate of 4.6 percent. This dynamic industry is shaped by rising urbanization, infrastructure expansion, and technology improvements. To fulfill global demand, I realize the necessity of innovation, sustainability, and product diversification. The Asia-Pacific region’s supremacy, owing mostly to rising industrialization, shows the sector’s bright future. Finolex Cables’ focus is aligned with these trends, guaranteeing that we remain at the forefront of the industry’s evolution.
