Arfin India is set to enter the cable and conductor manufacturing targeting the power sector apart from adding two other products segments, viz. alloy products and cored wire products as part of its diversification measure.
Arfin is currently one of the fastest growing companies in aluminum sector in India and brings together a range of aluminum products used across various industries and diversified applications. The company has of late diversified much and is still in the process of diversifying further the existing businesses through addition of new product lines, viz. alloy products, cored wire products and its entry into the power sector through cable & conductors plant.
Arfin India Limited is entering into the power sector business during 2016-17 through a cable & conductor’s plant which indicates that power is a strong growth area for the company. Wire & Cable India recently interacted with Mr. Mahendra R. Shah, Chairman, Arfin India Limited to know about the strategy behind the rapid growth the company has witnessed in the last few years. Excerpts from the interview:
Wire and Cable India: To start with, tell us how Arfin India has grown so swiftly in very short span of time from its inception not so long ago.
Mahendra R. Shah: Arfin started its journey in the field of aluminum products manufacturing during January 2012 and today, Arfin is a name to reckon and market leader in the aluminum sector. Our mission is to be a premier name in its business segment by fully understanding the diverse market requirements and providing clients with the right products to achieve consistent success.
The strategy and operations of the company are driven by the Board with experience and vision to steer the company in Indian as well as global markets. It has seeded several initiatives and projects that will bear fruits in the upcoming years. Arfin is currently one of the fastest growing companies in aluminum sector in India.
Moreover, everything Arfin does begin with the customers and the goal is always to exceed their expectations. We offer products and quality to the customer industries, irrespective of their location, size and expectations as they are a source of continuous inspiration. And, this is the reason why Arfin has grown so quickly to a considerable scale.
WCI: Please share with us your existing product portfolio along with production capacity, facilities, and machineries. Which industries do you cater through these products?
MRS: The company has essentially six product lines, viz. aluminum wire rod, aluminum deox, cored wire, alloy products, automobile parts and cable and conductor. Out of these six products lines aluminum wire rod, aluminum deox and cored wire businesses are matured businesses. Arfin started aluminum alloy business during last quarter of the FY16 and is expecting big volumes during 2016-17. It has added 16 premium customers in the alloy segment during the year FY16 which helped diversification of businesses.
Moreover, Arfin India Limited is bringing together a range of products which has diversified and is in process of diversifying further the existing businesses through addition of new product lines, viz. alloy products, cored wire products and its entry into the power sector through cable and conductors plant.
Arfin also has ventured into aluminum-based master alloys business through addition of a new plant at the existing premises. Initial plant set up has been completed and the company plans to start the commercial production by the 3rd quarter of 2016-17. Master alloy is a base metal such as aluminum, copper or nickel combined with a relatively high percentage of one or two other elements. It is a semi-finished product and is manufactured for its usage as a raw material by the metal industry.
WCI: Tell us more about the diversification into cored wire products, automobile alloy products, conductors and cables.
MRS: During the year FY16, the company has commenced commercial production and sales from alloys and cored wire business. The cored wire plant was started during March 2015 and got matured during the year. Set up of cable and conductor plant has been completed during the year and trial production from this plant has also been done. ISI Mark for conductor and cables plant has also been received and the plant is ready to start commercial production.
Moreover, the newly started business of cored wire got matured during FY16 and the current plant is running at its full capacity since the 3rd quarter of the year and is fully booked for FY17. The company has already purchased one more plant to meet the increased market demand. The company has already created space required for the installation and commissioning of the second cored wire plant. The second plant is expected to start commercial production from third quarter of the 2016-17.
Besides, Arfin started commercial production and sales of aluminum alloy products during the month of November 2015. The existing plant has been running at its full capacity since March 2016. The company plans to buy one more plant to meet the increased market demand and has already created space required for the installation and commissioning of the second plant.
We have also forayed into aluminum based master alloys business through addition of new plant at the existing premises. Initial plant set up is complete and we plan to start commercial production by the 3rd quarter of 2016-17. Master alloys are produced in various shapes, viz. ingots, waffle plate, rod in coils, etc.
Moreover, once the cable and conductors plant gets operational, we plan to add one more aluminum wire rod plant to meet the production requirements of cable and conductor plant. The company has already occupied the additional space required for the set-up of aluminum wire rod plant which will be set up as soon as the cable and conductors plant gets operational.
WCI: Coming specifically to conductors and cables, what products are you planning to produce? Tell us separately for conductors and cables. Also, tell whether you have got all the certifications and approvals for these products.
MRS: In cables, we intend to produce aerial bunched cables (ABC), which is a very novel concept for over head power distribution. When compared to the conventional bare conductor over head distribution system, ABC provides higher safety and reliability, low power losses and ultimate system economy by reducing installation, maintenance, and operative cost.
As said earlier, the cable and conductors plant set-up has been completed and the trial production has also been completed from the plant. ISI mark has also been received and the plant is ready to start commercial production of cable and conductor products. Arfin has state-of-the-art, manufacturing machineries completely equipped, up-to-date laboratory which ensure rigid check at every stage of production and a self-oriented workshop to suit the entire check-up and maintenance of machines, inflow and outflow of material. This product line will be a forward integration of existing product line of aluminum wire rod. We will produce aluminum conductors from aluminum wire rod. This forward integration of product line will add higher margins to the business.
Among conductors, Arfin will be producing AAAC (All Aluminum Alloy Conductors) and ACSR (Aluminum Conductors Steel Reinforced). AAAC is used as bare overhead conductor for power transmission and distribution lines on aerial circuits that require larger mechanical resistance than All Aluminium Conductors (AAC). ACSR consists of stranded or solid steel core enclosed by strands of aluminum. These ACSR conductors are made available in broad range of steels varying from as low as 6 percent to as high as 40 percent. The superior strength of these conductors is ideal for overhead ground wires, river crossings, installations involving extra long span and many other applications. These conductors ensure high tensile strength, manufactured using best quality materials.
WCI: Give us a brief idea about the Indian aluminum industry. Also update us on the overall growth outlook of the industry.
MRS: In the previous decade, the Indian aluminum industry experienced substantial success among the other industries despite of the fact that globally aluminum industry continued to go through a difficult phase. The aluminum market in India is still growing at a CAGR of 9 percent to 10 percent over the last five years and it is going to remain so in the near future. This favorable situation is expected mainly due to the government’s focus on uniform infrastructure development in the rural areas, cultural changes resulting in more and more nuclear families with higher disposable income.
In order to take advantage of favorable situations, the Indian aluminum industry is developing fast and the advancement in its technologies is boosting the growth even faster. It has a bright future and it can become one of the largest players in the global aluminum market as in India, the consumptions are fairly low as compared to developed countries.
Moreover, investors keeping an eye on aluminum prices are no doubt well aware that the metal has been in a consistent state of weakness in 2015-16. The country’s stock market fluctuations this year brought down a large basket of commodities, including base metals like copper and iron as well as critical metals like manganese and tungsten, of course, industrial metals like aluminum and vanadium were also affected.
Also, over capacity in China will cap prices on the upside over the next ten years. China will remain in surplus and exports will rise.
