The auspicious occasion of ribbon-cutting ceremony for the completion of the cable manufacturing plant of General Cable at Baddi, Himachal Pradesh, India was witnessed by around 200 high-ranking government officials, business leaders and other guests. The Honorable Chief Minister of Himachal, Mr. P.K. Dhumal, inaugurated the plant, while the Industry Minister of the state, presided over the function. The company itself was represented by Mr. Mathias Sandoval, CEO of its Rest of the World Division, Mr. Peter Campbell, Senior Vice President of Asia & Mr. Sandeep Sood, CEO & Country Head of India Operations. Team Wire & Cable India caught up with Mr. Sandeep Sood, CEO & Country Head, General Cable India from his busy schedule and interacted with him on the prospects for General Cable in India, its long term vision, USP at General Cable, new facility at Baddi and his views on wire and cable industry. The interaction started with the brief about General Cable, its worldwide operations, presence and industrial sector it serves.
About General Cable
General Cable a fortune 500 company, the world third largest wire and cable manufacturer headquartered in Highland Heights, Kentucky, U.S.A., is a global leader with 12000 associates in six continents, is in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial, specialty and communications markets. With the image of being an innovator for more than 165 years we develop products that are a critical part of the fabric of the world. We have always been dedicated towards connecting and powering people’s lives. Through the successful commercialization of new technologies and partnerships with leading connectivity providers, we have continued to grow our communications and electronics businesses, quietly achieving global size and scale.
Indian Presence
In 2009, General Cable established its locally incorporated firm, named General Cable Energy India Private Limited, thus launching the setting-up of India’s first & only, low carbon foot-print & green building compliant, wire & cable manufacturing plant. Since 2010, it has been sending its domain specialists & research scientists to India as a means of promoting its globally acclaimed, best business practices, while setting-up partnerships with Indian research institutions. Nowadays, being a green supplier has become a very important element to compete in the global market, and is gaining momentum. General Cable, being a member of the green supplier network, not only fosters and fully endorses its commitment to the enhanced corporate social responsibility (CSR) model, but more importantly, deploys its construct as a key differentiator from manufacturing & consumption stand-point.
New facility at Baddi
We have just inaugurated our wire & cable plant in Baddi, Himachal Pradesh, with the total investment of USD 35 million. Major products to be developed & manufactured at Baddi, Himachal Pradesh, the greenfield facility, located on a plot of around 100,000 square meters are special grades of overhead conductors, industrial & power cables. With the operationalization of this plant, General Cable has been equipped with the capacity to produce USD 100 million worth of industrial & power cables, along-with the capacity to produce USD 50 million worth of overhead conductors, placing it as a comprehensive cable manufacturing company in India, having a foot-print across all high-growth sectors of the Indian economy.
The Indian Prospect
India, one of the world’s top three fastest growing economies, over the last decade, is expected to treble its economic size to around 5 trillion USD, by the end of the on-going decade and the vibrancy of its private and infrastructure sectors, will continue to ensure an ever-increasing consumption of technologically advanced and performance-wise safe conductors & cables, to meet its energy needs, which happens to be the fifth largest as of now, feels General Cable. A number of power generation, transmission & distribution projects are underway in India, which would need sizeable volumes of General Cable’s trademarked products, to ensure better return on investment, along-with a lower life-cycle cost of servicing & owning concepts new for the Indian cable segment, but very well grounded in the developed economies of the world. General Cable would aggressively leverage its brand equity, product pipeline & research capability to leap-frog into the top league of Indian wire & cable companies.
USP at General Cable
General Cable India, being a wholly owned subsidiary of such a socially awakened organisation, has took it upon itself, to deliver to the Indian consumer, wire & cable products, which are made to International specifications, using the best materials & processes, to ensure safety of the consumers & sustainability of the Indian eco-system; it’s here to make a difference & on global terms. Our focus on the innovation, new product and solutions is always on the forefront. Our aim is to analyze the market changes and be the first to offer our customers the products they need, which is fully involved with the R&D process. Our green cables and solutions initiative is committed as a worldwide organization to reduce every, possible elimination of hazardous substances in our products. Our renewable cables concept is related to renewable energy sources such as wind, solar and hydroelectric, along with nuclear, which will have increasing investment for a long time.
Views on the wire & cable industry in India and its growing sectors
Overview: Mirroring the overall economic strength of India, in the global landscape, its wire & cable market is now the third largest in the world by total conductor weight or fibre km after China and the US. However, if one was to exclude the part of the market that is accessible to cable manufacturers meeting international quality standards, the market size shrinks to become the fifth largest in the world, behind Japan and Germany, as well. In terms of bare overhead conductor, nevertheless, India still continues to be the second largest market in the world after China.
Reflections: Despite the global & local, macro-economic head-winds, the Indian economy & consequently, the domestic demand driven, wire & cable industry, continued to grow during the post- depression years of 2008 & 2009, albeit at a slower, but respectable pace. Production and consumption growth did slow in 2008 and 2009, but 2010 & 2011 proved to be good years with insulated metallic wire and cable production rising to 865,000 tonnes conductor, and consumption rising to 825,000 tonnes conductor. The fibre optic cable sector, though, continued to stay soft, from both production & consumption stand-points, with the telecom sector its largest consumer, staying mired in controversy & policy quagmire. Total insulated wire and cable production value in 2011 was around USD 6.6 bn with consumption at almost USD 6.4 bn. The bare overhead conductor market, in 2011, stood at a value of around USD 1.7 bn.
Industry Status: The Indian wire and cable industry continues to be extremely fragmented, with a large number of small and mid-sized producers. Consequently, there is significant production of low-tech, low-value products like building wire, low voltage power cable, conventional bare overhead conductor and winding wire. The handful of ethical players are left to compete in the market-place with a large number of unethical ones, who don’t generally pay full taxes, use poor quality raw materials and typically produce poor quality wire and cable that does not meet Indian & global specifications & standards. Although the unorganised sector has lost some market share in the last few years, it still remains a major force in the market and looks set to continue to do so for the foreseeable future.
Way Forward: Looking ahead, the Indian wire and cable market seems to have a reasonably brighter growth potential, which should imply a greater rate than China, over the next few years. The country’s infrastructure sector craving & crying for reforms, which the federal government is beginning to exhibit some signs of redressing, this should result in a stronger demand growth which could take the market to over 1.2 million tonnes of conductor and over 11 million fibre-km by 2014. With the margins of most manufacturers, under severe pressure, profitability has been falling, which in turn, is expected to lead to some much needed, yet delayed, industrial consolidation. The entry of global bigwigs, should act as a catalyst on both counts industrial consolidation & technological enhancements.