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Interaction | April 2016

Future potential of cable industry is in Indian projects

Manish Bhatt, Chief Executive Officer, Shilpi Cable Technologies Limited

Just coming to China and India, China is maturing from youngest population to old population now. They are losing some competitive advantage in manufacturing. Whether India is in a position to capture that, particularly in your sector?
I think I would say more than young or old, it is the kind of projects that make the difference. If you take the government´s the key projects, be it smart city, power to everyone by 2020, housing for everyone, the whole focus is on infrastructure. For our industry, that is the potential. Power for everyone, for example, holds an immense opportunity for all of us, and I do not know if we have the capacity in the short run to even deliver the kind of ambition this government is exhibiting. So, we are very hopeful about all these projects, which sound great. We also understand the kind of work that will go behind them, but they have to come on ground, they still haven´t. So we are hoping that they come and we have a great opportunity lying ahead of us. As Shilpi, we would be participating in each of these key initiatives whether it is railways or defence, we have products to supply to all these segments.

What is the uniqueness of your products? I am finding that every product is tested for one lakh iterations or 10,000 operations. This process might be there with others. How will this reinforce your brand in B2C?
Our USPs include our end-to-end product range, our solution-oriented approach in B2B. For example, we don´t just sell components, we partner with them and offer them comprehensive solutions. In B2C also, we are trying to offer end-to-end solutions. Second is, we are trying to implement our learning from B2B across the B2C businesses as well. For example, if you take our telecommunication segment, it is highly innovation-oriented. We were the first one to bring in RF, aluminium RF cable and today, but for Airtel, everyone uses aluminium. We have a lot of innovations starting with application to the product quality. In auto, we have to deliver the products just in time, so a lot of effort goes in for ensuring that the product does not fail. We have implemented all those processes in B2C as well.

You do not have too many joint ventures with multinationals. That means do you rely on inhouse R&D, customer feedback and addressing their concerns?
We have a good in-house R&D facility, with ten people. Besides, we have been talking to IITs for various technology developments. So, there is an in built focus and energy. But wherever we feel that we are lacking, or see no point in wasting efforts, we are establishing joint ventures. So, for telecom antennas we have joined hands with Eyecom for getting technology. We want to be at the top of the technology today.

There are a couple of open debates - in India, we have a lot of people and cost of labour is also very low. Whether human resources can be a substitute for technology or technology will be a substitute for human resources?
I strongly believe it is the market forces that will decide. So there is, for example, harness business, where one would definitely like to have a lot of manpower. We deploy almost 700-800 people in our harness manufacturing facility, and as your business grows, manpower grows and you are competitive because that´s the way to go with that business. But in cable manufacturing, if you deploy the same, you will be out of the market. So, it doesn´t matter what you think, it is the market economics which will drive.

To what extent have we adopted standardisation and global benchmarks in these areas and to what extent is an unorganised structure is able to survive?
I was at Saudi Arabia and visited the market and saw all LED bulbs are of Chinese make, but no one wants to buy them. That is the dichotomy. Chinese products have an image of lacking in longevity, which goes against the products, but the prices are so attractive that customers are still willing to buy them. However, I am sure that once the customers come across frequent failures, their opinion will change. I think it will take some time, but a quality product will always have a sustainable growth in long term. Even in India the share of branded market is increasing. If you notice, demand for quality and branded products is on the rise, generally. How do you tell customers that they are good vis a vis not good? This is the brand which does that.

What are the verticals you are present in, and what are the unique features of your products?
Shilpi Cables Technologies was started in 2006 by the promoters who had been into cable manufacturing for the last 40 years. We started with our Radio Frequency (RF) cable and we entered the telecommunications segment and mostly we were a B2B company, so we chose various verticals and started specialising in them. In the first vertical, telecom, today we supply complete RF solutions either for external coverage or for internal, in-building solutions. We supply whole equipment to all the operators, including Airtel, Vodafone, Idea and Reliance Jiyo, for their networks. And today we have a large share in all operators. Second, we have interest in automobile segment. In the automobile segment, we make that small harness and we supply wires for the main harness. Today we have a reasonable share in two-wheeler market and we are in various stages of approval in the four wheeler segment, which is almost 45 per cent. Third is, our white goods segment where we supply the power cord and harnesses. Then we have enamel copper, which goes into all the segments involving a motor or transformer. We make both aluminium and copper enamels. So, this is the B2B portfolio for us. And of course, we sell copper conductors, the wire manufacturing is a different process phenomenon. Apart from that, two years ago, we have also entered B2C with an objective of providing a comprehensive range of solutions for household electricals, with a brand called ´Safe´, which we launched at ELECRAMA. Now, we have introduced all kinds of wires and multi-core, communication cables. So we have full range of cables. We also have the devices for wire devices, modular switches and safety devices like MCB, RCCBs and distribution boards.

Actually in B2B segment, you seem to be a supplier for many global brands. Are there any hints from them for supplying international factories or something like that?
I had been with the auto parts manufacturing association entourage to Japan, where 21 CEO´s represented India. We visited Suzuki, Nissan and various other plants. Those players who are still not present in India have set up their sourcing base in India. Everywhere we went, their CMDs came and met us, because there is a huge respect for India´s auto-component manufacturing industry. So, there is a huge requirement. There are two ways in which the export market is getting addressed now. One is, the OEM´s themselves are going to export. So, all the OEM´s are setting an export hub in India. Secondly, they are putting their purchase set-up here, so they can source for other locations. So definitely with this kind of confidence in them for good quality at a reasonable price, I think we have a great future.

- BS Srinivasalu Reddy

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