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Amit Jain, Managing Director, CMI Ltd

02 Sep 2016

High voltage transmission conductors and cables to see exponential growth The market for high voltage transmission conductors and cables is all set to explode with various reforms being unleashed by the government in the power transmission sector. Amit Jain, Managing Director, CMI Ltd, talks to InfralinePlus on his outlook for the cabling sector in India and how initiatives like Make in India are provind a huge impetus to the industry.

How has Make in India impacted the power and industrial sector in India?

Make in India has provided huge impetus to the industry. With the focus on new manufacturing facilities in India, the wire and cable industry market will definitely witness growth. With the focus shifting to manufacturing in India, the industry wins in another way. The Chinese sub-standard imports, that cause trouble and give a bad name to the industry, will possibly be replaced by more robust Indian counterparts. Indian companies in the industry will start focusing on R&D, innovation and product quality, now that the industry is gearing up to take the challenge head-on and is creating awareness about the need for certifications and educating the influencers in the category.

What are the key growth drivers for your power cabling business?

The key triggers for our business growth have been constant innovation and focus on R&D. We have managed to stay ahead of the technology curve and this has been because of us pumping money into the R&D and we have innovated new products, keeping in mind changing customer requirements. We have been also focused on quality and that is why we are the preferred supplier for most of the categories that we operate in. This has been visible in our growth trajectory, with us going from the revenues of Rs. 5.6 Crore in 2004-05 to Rs.240.22 Crore in 2015-16.

How has been the growth in your cabling business in the power sector? Has growth in renewable energy capacity impacted your business?

Currently, around 17% of our revenue comes from the power sector. We have already geared up and have increased our capacities substantially to meet with the increased demands. We expect that the power industry’s share of our revenues will rise up to around 20% and the real numbers will possibly double with the increased demand. In power sector, cables and wires are a must and we believe that there will be many openings and avenues available in the sector in the future. We have the wherewithal and the product range to service this sector as well.

Please share your outlook on the power sector going forward in terms of demand and supply as well as growth.

The Government is spending a huge amount in the power sector which is pegged at around US$ 1 trillion (Rs. 65 Lakh Crore) investment kitty by 2030. The figure includes around 40% of power gear which will be by domestic manufacturing in India. This in itself is a stupendous figure and possibly points to the explosive growth in the sector. We have already put in place the most modern technology in our recently acquired facilities, which are possibly the best in the country. We are amongst very few companies in the country to manufacture the maximum range of cables being used and will, we hope be able to reap rich dividends from the investments made.

Which are your key segments/ target market for high voltage and low voltage power cables?

Our key segments / target market for high voltage and low voltage power cables include Power Generation & Transmission Utilities, Power distribution Utilities, Refineries & Petrochemicals, Cement & Steel Industry, Railways & Metro Rails and Infrastructure Development Utilities.

What are the key issues facing cabling business in India? What suggestions would you have to remove those challenges?

The issues are three-fold. First are input costs, which can change majorly with the variation of cost of raw materials. Second is issue of Certification, which is not standard and the third is the issue of Quality and R&D in the segment. The fluctuating price of raw material (copper, etc.) is a concern area for key players in the organized sector. It becomes an even bigger issue for players like us who are focused on the B2B segment and our bottom lines are impacted by any steep price rise in the raw materials. Global certifications and requirements are very different from that in India and it is therefore important that any Indian organization that is looking at sales abroad keeps itself updated on the global requirements. Constant quality checks, R&D, Innovations, and Certifications will be the way to excel in exports. Short turnaround times on customization requirements will also help the cable companies in the global arena. Research & development is most important in any field of manufacturing activity. One has to be updated with any development in the industry in the country or abroad. The requirements of customers are changing. Special insulating / jacketing compound with special parameters like fire retarding parameters, low smoke zero halogen parameters, TPU jacketing, lead free compounds etc are now in demand. Similarly there are different changes in construction of cables to meet specific requirement of customers and we take all necessary action to meet these specific requirements.We at CMI continuously keep ourselves updated with the development in the industry in country or abroad & with new requirements of the customer and keep producing cables as per customer requirements. We are putting in a good portion of our revenues in R& D activities including putting in the most modern plant & machinery and trying new raw materials.

The government is opening up the power transmission segment for private players. What are your views on this issue?

The possibilities are immense and we believe that the opening up of transmission sector will exponentially explode the market in the segments that CMI operates in. With the private players’ entry into transmission, there is a huge scope for extra high voltage transmission conductors and cables, because we believe that the focus will be on changing the legacy cables and putting in wires and cables that can minimize distribution losses due to leakages, which currently accounts for as much as 20-25% of the total power being transmitted. We believe that our market share will grow exponentially with these and we will become an even more significant player in our categories of operation. We already manufacture a wide variety of conductors and cables targeted at the EHV transmission segment and will be able to capitalize on the opportunities.

Please elaborate on your presence in the power and industrial segment in terms of your offerings.

In the power and industrial segment, CMI is manufacturing cables, wires & conductors for wide range of application. There is a wide variety of cables that we have developed and have the capability to manufacture. We are in B2B segment and have clients in every sector.