IEEMA organised a day long Cable
Industry Conclave with the theme "Changing Technology and Growing India" at
Mumbai on 5th December, 2009. I had been invited to deliver the
Keynote Address. What I decided was to listen to a few Presentations before I
spoke and also listen to a few other important Presentations after the Keynote
Address. On balance, it was an interesting and educative deliberation.
Before I outline the gist of
these Presentations, my own extempore address and also the discussions that
followed, it would be relevant to briefly highlight the salient aspects of the
Indian cable industry.
There are a large
number of cable manufacturers in India numbering almost 250. Around 125 of them
are Members of the IEEMA and they would represent almost 80% of the total
industry. Others are mainly engaged in manufacturing of products for house
The volume of this
business could be judged in terms of the annual turnover, which is of the order
of around Rs. 12,000 crores.
Just as in all
other industries, out of 250 manufacturers, only 20 account for almost 80% of
the volume of sales.
The industry is
fully established for all types of cables ranging from 1.1 KV upto EHV Cables
upto 220 KV (in development stage).
In terms of
physical units, the total length of cables produced annually is of the order of
over 1,15,000 Kilometre - over 82,000 Kilometre in the category of PVC and XLPE
Power Cables and over 32,000 Kilometre of LT Control Cables.
imports cable of different types worth over Rs. 400 crores (the value of imports
during the year 2008-09 was about for Rs. 405 crores). More than 45% of total
imports is from Thailand followed by about 20% from European countries, around
12% from China, 9% from U.S.A, 8% from Korea and balance from other countries.
The general belief is that import from China is very high, but from the figures
of 2008-09, it is around 12%, though it is understood that the import proportion
from China is on the increase. Obviously, the domestic manufacturers will need
to tighten their belts, examine every element of costs with a view to cutting
them down and improve productivity to emerge winners in the face of global
Factors impacting the growth of cable industry
Cable industry is a common
supplier to almost all the industry groups, be it power, steel, fertilizer,
petro-chemicals etc., or agriculture, services or even domestic requirements.
However, power industry is the biggest consumer of cable. It is needed in all
areas of utilities, cutting across all the segments of power industry - power
generation plants, transmission systems and distribution networks. Within the
power group, the largest requirements are in transmission and distribution,
In the early decades of power
development programmes, appropriate emphasis was not given to transmission
sector and the distribution. As a result, right upto early 80's, both these
important segments of power industry received inadequate attention. Investments
made were much less than required. Effect of this was rightly experienced in
terms of avoidable stresses and strains in transmission and worse in
distribution of power. Gratifyingly, with the emergence of national level power
companies like NTPC, NHPC, and later Power Grid etc., Extra High Voltage (EHV)
transmission system started receiving better attention.
Since the Indian cable industry
has remained, by and large, confined to low voltage systems, the expansion of
EHV transmission did not translate into larger growth for them. However, since
the power sector grew, its positive effect on their growth was inevitable. The
real expansion of the cable industry was witnessed when the policy planners
thought in terms of realigning the priority of power sector reform - from a
completely generation centric approach to renovating and modernising
distribution. It was recognised that unless distribution is appropriately
managed, not only in terms of revival of financial health, but more importantly
in terms of strengthening, augmenting and modernising the distribution networks,
power sector reform initiatives will be hard to take off.
Tenth Plan will be remembered as
the turning point in the history of power sector reform, more importantly
distribution reform, inasmuchas two powerful initiatives were launched for
implementation during this Plan. The first, viz. Accelerated Power Development
Reform Programme (APDRP) aimed at upgrading the distribution systems in towns
and cities and the second viz. Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY)
aimed at creating a robust rural electricity distribution backbone. Both these
Schemes were fully supported and financed by the Government of India.
Availability of fund was not allowed to be an issue in implementation of these
Emphasis on improving
Distribution Systems resulted in exponential expansion of the cable industry.
As a matter of fact, if we look at the growth of the electrical industry, which
service power utilities, during the Tenth Plan, the rate of growth could be
better appreciated. During the year 2000-01, electrical industry, which is
represented by IEEMA (having almost 500 Members), suffered a negative growth.
Starting from 2002-03, the annual growth never looked back and improved to 7%,
12%, 16% and then beyond 20% within the five year period of Tenth Plan. Cable
industry obviously had the benefit of the commensurate growth.
The trend continues. In the
Eleventh Plan, both APDRP and RGGVY have been continued, in fact, with greater
emphasis to complete the unfinished Agenda, though the first year of Eleventh
Plan did experience some degree of delay on both these Schemes. If we take a
longer time frame perspective, power sector growth over a 25 year period is
targeted to follow an overall 8 to 9% rate of increase annually. This will
demand massive expansion of all the industries associated with the expansion of
power sector. Obviously cable industry would be a great beneficiary. If they
follow business - as - usual approach, remain confined to lower voltage
transmission and distribution systems and domestic wiring, they would have a
normal growth as the sector grows. But, wisdom will lie in innovating new
opportunities by way of their transformation into provider of cables for
sub-transmission and Extra High Voltage transmission systems. This major
orientational change could contribute enormously to a radically higher level of
growth for cable industry.
Long term Strategic Perspective for Cable Industry
Indian power sector continues to
suffer huge electricity distribution loss in the system. While a good part of
the loss is attributed to factors such as poor metering and theft of power, a
good part of the loss is also to be attributed to technical problems including
losses in cables, conductors and other hardware in the system. One of the ways
the loss could be reduced is to have underground cabling and better cable
specifications. I recall, in the BSES, which I presided over as the Chairman,
during 1994-2002, we had considerable advantage on account of underground
cabling. We could reduce the overall loss to less than 11%.
APDRP has supported conversion
of overhead distribution through conductors into underground cabling in a number
of towns. There is a strong case for underground distribution systems to be
implemented in all the towns. While this will be a desirable approach, a few
problems which the cable industry needs to address include the method and manner
of laying underground cables and also in regard to insulating the system from
the problems caused during rainy season. My own experience in Mumbai indicates
that in view of the old method of digging trenches, opening up roads leading to
inconveniences to public, the process of cable laying quite often faces
resistance from Municipal Authorities. We need to adopt new technologies for
laying underground cables which will obviate the requirement of digging
While on this subject, I would
also like to emphasise that manufacturers, in general, in India feel that their
job ends when the product has been manufactured and connected activities like
transportation, erection are the responsibilities of other agencies. While
technically this might sound logical, in the interest of manufacturing sector
itself it is necessary that this mindset changes. If we want that all the towns
of the country should think in terms of underground cabling for electricity
distribution, it would do a lot of good to the cable industry, if they package
the system with the total solution approach which would include laying of cables
through modern methods.
Another linked problem, which I
myself experienced, during my association with BSES, is the issue of managing
supply during rainy season. When the area used to get submerge with rain water,
we had to cut-off supply for the fear of water electrocution. A proper solution
has to be found out. Perhaps the problem lies with the quality of insulation,
with the quality of jointing of cables, and with the way junction boxes are set
up. Obviously the industry will not be able to articulate a convincing case for
converting overhead distribution systems into underground cabling, if this
problem remains unattended.
Failures of cables due to over
loading lead to disruption of power supplies. The industry may feel that over
loading could have been avoided by better consumer discipline. But, this would
be too ideal and too good to happen in practice. We all know how our
electricity consumers behave. They might think that they would have one
airconditioner in the house and, therefore, their connected load will correspond
to the need felt at that time. But, in practice, every summer the households
keep increasing these gadgets. If the system planners do not factor in the
changing behaviour, and needs of consumers and if cable manufacturers feel that
the entire system could behave in a normal way, both of them would be grossly
mistaken. Required redundancies need to be provided in planning and similar
should be the approach in designing. Failures on account of bursting of cables
must be eliminated. How this outcome is achieved would be determined by the
ingenius approach of the system planner and the cable designer.
Quality of power supply is
another important aspect. Lower voltage drop improves power quality. Similarly
lower impedance improves power quality. Proper design, suitable material
specification and required workmanship would be in a position to deliver both
these desirable characteristics, leading to better power quality. Research and
development and technology up-gradation are two important issues. Unfortunately
Indian cable industry has not paid adequate attention. Both research and
quality have taken back seat, in spite of rapid growth of the industry. Unless
large players in the sector assume leadership role and take appropriate
initiatives, the Indian cable industry may face even tougher competition from
outside. While quality relates to work culture, better training, and a
commitment to quality, R&D requires long term investments.
Standardisation not only helps
in cost reduction, but also enables better maintenance. However,
standardisation in general comes in conflict with ever changing needs of
customers. Power industry in India has changed its profile not only
quantitatively but also qualitatively. The sizes have changed, magnitudes have
changed new desires for new features lead to different types of technological
solutions. The paradox of changing needs and, yet, effecting right degree of
standardisation needs to be resolved. There would be common areas of
convergence that within a regime of technological up-gradation, standardisation
will be possible. Research and development, if properly undertaken, will
provide right solutions in this regard. Different aspects of research could be
undertaken by major players in the industry, which could be networked and
Time has come for the Indian
cable industry to prepare to occupy the space hitherto occupied by conductor
industry in the area of Extra High Voltage transmission system. Massive
expansion of Indian power sector is already showing up in terms of extra
ordinary demands on right-of-way for laying overhead EHV transmission systems.
In spite of our shift to 800 KV, and in future to even larger voltages, right of
way will be a real challenge. Underground cabling in EHV field could be a good
solution. However, the industry has to work hard to make it cost effective.
Ultimately, it has to compete with the overhead systems. While making cost
comparisons, obviously, required cost loading should be done on the right-of-way
problems. Globally, it seems, good amount of work has been done for development
of cables which can handle EHV requirements. There is a scope for joint venture
arrangements and transfer of technology. The industry must aim at first getting
into EHV area and subsequently progressively enhancing its proportion.
Fascinating future lies ahead
for the Indian cable industry. Opportunities will not be wanting. How much of
the growth of Indian power industry, and of industrial growth in general, Indian
cable industry is able to capture, will very much depend on how innovative they
become, on how they respond to research and development, to technological
up-gradation, to high standards of quality, to moving towards EHV systems and
lastly, but most importantly, to safety requirements. Global competition will
require that they stand out on emerging technologies, in quality and compete
effectively on cost.