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Interaction | June 2018

We are eyeing Rs 30 billion high voltage cable market in India

Having been in India for 15 years and having established a strong technology partnership with <span style="font-weight: bold;">KEI Industries, Mayukh Banerjee, Chief Executive Officer, Brugg Cables India </span>foresees tremendous opportunities in India's Rs 300 billion cable market.&nbsp; <br /> <br /> <span style="font-weight: bold;">How is the overall business environment for wires and cable industry in India? How has Brugg Cables placed itself in this market?</span><br /> The history of Brugg dates back to 126 years and we entered the Indian market a bit late. However, though we have been in the Indian market for just 15 years now, we are among the few players who manufacture high voltage cables upto 550 kV. We do not have any manufacturing plant in India and our products are imported from our Switzerland facility. We have four manufacturing units in Switzerland, China, Poland and New Mexico, USA. In India, we are quite well placed. <br /> <br /> Our products have been approved by most of the utilities, including Power Grid, NTPC, MSCDCL, Reliance, UPTCL etc. A year back, we received a big order worth Rs 200 million for Reliance Industries, which was implemented in record time. That apart, we also executed a turnkey project of 400 kV at Tata Steel in Telangana. <br /> <br /> It was a single project which involved supply of cables and terminations, and we took care of the complete project management. <br /> <br /> I think, in India, the cable sector is witnessing a boom mainly because of one common challenge faced by implementing agencies, which is right of way. Instead of overhead transmission, implementing agencies are installing underground cables. This is an opportunity that has compelled cable companies to setup their base here. Although the sales margins have eroded, the overall scenario looks quite promising. <br /> <br /> <span style="font-weight: bold;">What is the opportunity for high voltage cable market in India?</span><br /> Overall, India has a Rs 300-billion market for low, medium and high voltage cables. Of this, around 10 per cent will be for high voltage, which is around Rs 30 billion, and that is a huge market to tap. <br /> <br /> <span style="font-weight: bold;">Since you are majorly into high voltage cables, how do you view the business opportunity from the transmission sector?</span><br /> We are not into overhead conductors as far as the transmission segment is concerned. We are mainly into underground cabling, and in India, we have a technology tie-up with KEI Industries. So, whatever technology we follow in Switzerland - say, with respect to the quality assurance programmes for companiesûwe replicate exactly the same in India. With the joint collaboration, we are making our geographical presence in India stronger. We have a license agreement with KEI Industries to provide technology to manufacture products upto 200 kV. Meanwhile, we are in an active consideration with KEI Industries to ramp this up to 400 kV. And they will be manufactured from KEI's facility in India. The prototype has already been developed and it is undergoing type testing in Italy. So hopefully, KEI will be in a position to commercially launch this product by early 2019.<br /> <br /> <span style="font-weight: bold;">Why are you engaging in technology solutions tie-ups only and not having your own manufacturing unit in India? </span><br /> For setting up a manufacturing unit in India, we should be in a position to capture the 400 kV cable market completely. We would also require an investment of $ 30û40 million, which is a significant amount. So our primary objective is to capture the market with local presence. Since KEI is a well-established name in the Indian cabling industry with a turnover of Rs 30 billion plus, we see this to be a healthy partnership and that is where our focus is.<br /> <br /> <span style="font-weight: bold;">How are you likely to leverage the smart cities opportunity?</span><br /> There are plenty of opportunities in the smart cities project, especially for underground cabling, particularly in the 66 kV and 132 kV segment. The overall project opportunity would be around Re 1 billion. <br /> <br /> <span style="font-weight: bold;">Do you think sourcing materials from Switzerland is a challenge due to taxations issues in India? </span><br /> Taxation is the second stage. Primarily, importing a product from Switzerland is going to be costlier than manufacturing the same product in India because the overhead cost is high in Switzerland. But eventually, in terms of technology or competence, as I mentioned, there are very few players in the world who have the competence of manufacturing upto 550 kV or even 400 kV. Till now, nobody is there in India with capacity to manufacture upto 400 kV. <br /> <br /> <span style="font-weight: bold;">There are a lot of technologies and new-age raw materials being used for an efficient power transmission. So what new technologies are making inroads? </span><br /> One of the future trends is eventually going to be in the DC cable segment. Since we have a strong research and development base, we are much interested in manufacturing DC cables because this is the future now. I would also like to mention here that whenever you are talking about a cabling project, the cable is definitely important; however, the important factor is that the cable termination and cable joints need highly skilled people. It is not a layman's job; everybody cannot do it. <br /> <br /> Particularly, when it comes to high voltage, you need highly skilled people. We are the only company in high voltage cabling who have people in our payrolls, who are all trained and certified from Switzerland to undertake this high technology activity. We have a team of around 12 people exclusively in our project system, who do this installation work on their own.<br /> <br /> India has a Rs.300-billion market for low, medium and high voltage cables. Of this, around 10 per cent will be for high voltage, which is around Rs 30 billion.<br /> <br /> <span style="font-weight: bold;">- RAHUL KAMAT</span><br />
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