Leading with a diversified portfolio, standing at attractive Rs. 2170 crore now and aiming a fascinating 7000 crore by 2020 have something in common. That’s KEI.

He is a leader who knows well the necessity for building an organization rich with data prowess–as well as a culture of innovation through which the value of brand permeates. He understands the needs of products diversification, innovation and, above all, a pool of skilled man power in order to gain credible brand value to sustain in the market. Wire & Cable India recently caught up with Mr. Anil Gupta, CMD, KEI Industries Ltd. to have an exchange where he delineated on various aspects of the company’s growth.

Awarded recently with ‘Superbrand’ status for the year 2014-15, KEI industries knows exactly what it takes to maintain the leadership streak consistently in the Indian wire and cable industry. Rising from a modest inception of manufacturing house wiring rubber/PVC cables in 1968 to producing a whole range of important wire and cabling solutions today only shows KEI’s thorough commitment to grow by perpetually developing both products and markets.

What was apparent in the conversation with Mr. Gupta are here as the excerpts:

Wire & Cable India: Let us know the KEI’s journey since 1968, from a humble beginning to becoming one of the most diversified product manufacturers in the wire and cable industry today.

Anil Gupta: The company started by my father in 1968 broke into the scene with the manufacturing of rubber insulated appliances cable which was widely used in white goods. Around 1977, we started making dry core telecommunication cable which was a huge draw for the Indian Post and Indian Telecommunications departments. As for me, I joined the company in 1980 and we began developing the railways signaling cable, at the same time maintaining our dominant position in dry core telecom cables for the post and telegraph departments.

Then 1986 onwards, the project business drew our attention and it was only a matter of few years that KEI became a leading supplier to thermal power, power transmission and distribution projects where we served companies like NTPC, BHEL, Engineers India, etc. In next five years by 1992, we had had a significant presence in the most of projects related to power, oil refineries, and other industrial projects. Happily, we were the most dominant player for 10 subsequent years in these sectors, and that’s the status even now.

However, going is not good always. That was the case at least in 2001, when we added a plant for the manufacture of jelly filled cable. We just worked it over for almost two years only to realize the technological obsolescence of our venture and almost null product demand for jelly filled cables. We took no time in getting out of it.

Our focus became more concentrated on power cables now and we entered into building wires segment where KEI diversified itself by making house wires, instrumentation cables, etc. We also began producing rubber cables for wind mills and mining purposes.

WCI: If one asks you to enumerate the major challenges KEI faced during this journey, what would be those?

AG: We have seen, like everybody else, many troughs and crests in the KEI’s growth wave for over a period of many years. Every company and enterprise eventually is an integral part of national economy which in turn is a part of global economy. The events in global and national economy affect the demand-supply equation and that ultimately influences enterprises and businesses. KEI has not been isolated from these economic effects.

During 1991-93, there was economic sluggishness which receded 1993 onwards and economy looked good till 1997. We, though, observed a steep fall in demands and investments in projects by govt. after 197-98 affecting companies like us who were supplying significantly to such govt. funded projects. As is the case, in India, the major investor is the govt. in infrastructural and other projects. The economy remained on low pitch during 1998-2003 and started showing signs of recovery only in 2004 and onwards till 2008. The fall in the world market for the commodities in 2009 again led to the crash of stock markets the world over and overall investments started plummeting affecting our supplies.

Then, as we remember, the Indian economy was supported by pumping stimulus packages and lowering down the taxes and excise duties. That’s, what I have outlined above, is the summary of what we suffered and gained during economic slowdowns and risings respectively. This does not just suffice for KEI, other companies and businesses suffered more or less the same fate in general.

As a company, we started new businesses in 2010 and began producing EHV cables upto 220 KV under Technical Collaboration Agreement with Brugg Cables, a century old Swiss company. We also entered into executing turnkey projects with EPC business model, like the one we did for RAPDRP, and many other such projects on turnkey basis 2011 onwards. We have now gained considerable experience for executing turnkey projects and have become quite stable in EPC and EHV cable businesses.

AG: Certainly, there are many as these are necessary to stay afloat. We have recently developed a new type of cable for solar and wind energy related cabling needs. KEI has also developed various off-shore marine cables.

As far as market development is concerned, that’s our constant endeavor to expand our reach to various part of the world where there can be conceivable market for us. In the process, so far we have developed many export markets, mainly in the Middle East and Africa. Right now, we are exporting to about 50 countries all across the world.

On the technological development front, we have mastered the high-tension cable up to 33 KV. We are doing various projects on turnkey basis in EHV up to 220 KV. Moreover, most importantly, we are intending to expand the capacity of EHV cables and enter into new EPC contracts. So far, we have done EPC in underground/over-ground cable projects, however now we are extending it to substations as well.

WCI: Elaborate more on your plans for EHV capacity expansion as well as EPC projects expansion. Are you planning to undertake EPC projects overseas as well?

AG: Yes, of course, we are considering taking the EPC project expansion to foreign soils. In fact, we have already taken initiatives and bagged a few projects overseas.

For EHV capacity expansion, we are mulling over doubling the capacity with the planned expansion. The orders of most of the plants and machineries have already been placed and we expect to commission the new capacity by Sept. 2016.

WCI: As you said that you have developed cables for wind and solar energy needs, how pragmatic do you find the efforts made in the direction of harnessing these renewable energy sources? Are these sources going to emerge as a viable for our future needs?

AG: Very pragmatic. In fact, renewable energy will be only viable source of energy in coming future as we are getting more concerned about the carbon footprints of other sources. In India, the renewable energy sector has a bright future because of the country’s tropical placement on the globe with ample sunshine and high wind speed on the sea coasts. Fortunately, India has got very long coastline also which confers immense opportunities for the wind to be harnessed into power.

The growth drivers of the renewable energy are quite strong such as almost null environmental impact, zero fuel requirements, and an endless amount of energy. The only challenge in the way to produce adequate amount remains the technological improvement in order to reduce the capital cost. Presently, the capital cost is very high for the solar and wind energy installations.

WCI: Your views broadly on the wire and cable sector?

AG: The wire and cable industry has a bright future based on the premise that energy holds the key of every progress that we make and we would need wires and cables to transport that energy. The energy generation has got immense scope in coming times, still more in India’s case where it’s still below the adequate mark. The more will be the energy generation, more will be the needs for wires and cables, hence the growth of the industry.

Due to ROW problems in most of the congested cities, underground cabling will keep on growing as there is no space available to put transmission towers. It is also important to bring down the AT&C losses to cut down on power theft.

In my opinion, most of the segments will witness high growth, especially the power cables and building wire owing to more generation of power and vigorous infrastructural activities in times to come. The activities in infrastructure, industrial, mining, and automobile segments are sure drivers for accelerated growth of the wire and cable industry.

Moreover, the replacement demands would be perpetually there as the establishments will be ever requiring the new cables replacing the old ones; that will provide a sort of steady business to the industry.

WCI: R&D is essential in designing and developing products that suits time and the need of customers. How does KEI take R&D into its account?

AG: Yes, product innovation is the outcome of constant R&D which is taken earnestly by KEI. Whenever new types of requirements and specifications come our way, our philosophy is to ‘never say no’. This attitude of ours has made many innovative products possible that now exist as an essential part of portfolio. We develop the products according to those specifications and in the process we have added many unique cables to our product basket.

The constant improvement of design within the ambit of given specifications and laid out standards is one of the mainstays in our R&D process. The aim is always lowering down the cost while enhancing the performance of the product. We have more often succeeded in attaining that goal.

WCI: What do you perceive are the major challenges and opportunities for the Indian wire and cable industry?

AG: There are many challenges and opportunities in the Indian wire and cable industry. However, to be specific, the increased competition due to increasing capacities of manufacturing companies is the most conspicuous challenge. That explains everything else as a challenge. Further, the steep fluctuations in metal prices from time to time are also among serious challenges. Human resources and maintaining a skilled manpower pool remain a challenge for every enterprise.

There are a lot of existing and emerging opportunities in India. The upcoming new investments in metro rail projects by various states will generate tremendous demand to the industry. The Govt. initiatives like smart cities and others will also lead to new investments. Rs. 600,000-800,000 crores by the Indian Railways in coming 5-7 years, as announced by the Railways Minister recently, will of course be a boon for the industry.

The ‘Make in India’ initiative by the Govt. is sure to make headways for the wire and cable industry as the increased industrial activities will have their own cabling needs. Further, with the rising middle class, there would be tremendous demand for houses, hotels and hospitals leading to ever increasing opportunities for the infra and construction sector ultimately converting into big demands for wires and cables.

WCI: What’s your numbers for the size of the Indian wire and cable industry?

AG: Presently, both organized and unorganized sectors combined, the industry size would be somewhere around Rs. 36,000 crores (USD 6 bn). I see a 15-20 percent CAGR in the industry; going by the rate it should more than double itself by 2020.

WCI: KEI’s mission by 2020?

AG: We are aiming to reach around Rs. 7,000 crores by 2020.

WCI: You must have some plan of action or strategy to reach to that staggering number?

AG: Next year onwards, we will look at going for a Greenfield facility and also increase our turnkey projects business to grow the company to the said numbers. As I have said already, the plan for EHV cable capacity expansion is underway; this will also be a component in our growth.

WCI: Is the foray of international companies in India a threat to indigenous players?

AG: No, I don’t think so. We have our own strengths to play on, and we would keep doing well because of our knowledge and penetration of the domestic market. These foreign players are anything but harmful to us. Their product may create a healthy competition for better product design and development. Moreover, it may be a win-win situation for both if a productive technical collaboration is forged between foreign and domestic players

WCI: Finally, don’t you think KEI should enter again into telecommunication scene?

AG: No, I don’t. There are enough players in that segment.