indian power cables industry

REPORT ON

INDIAN POWER CABLES INDUSTRY 2011

BIG STRATEGIC MANAGEMENT CONSULTANTS MAY, 2011

3, Hindustan Kohinoor Complex, L.B.S Road, Vikhroli (W), 400 083 Tel 022 67427821-29 URL: www.big-consultants.com

CONTENTS

1. Indian Economic Overview

BiG Strategic Management Consultants

3. Understanding Power Cable – Product & User Industry Overview

4. Major Players in Power Cable Industry

5. About BIG Strategic Management Consultants

2

2. Power Cable Industry Overview


q  Indian economy has

emerged with remarkable

rapidity from the slowdown

caused by the global financial

crisis 2007-09.

q  A l l t h e a d v a n c e d

e c o n o m i e s f a c e d d e e p

economic crisis , as the world

GDP dropped by 1.3% in

2009.

q  The signs of recovery have

been witnessed from fourth

quarter of 2010.

q  The Indian economy which

has also been impacted by the

global turmoil, posted a

growth of 8.6% in FY 2010-11.

Source: Indian Economic Survey 2010-11

3

INDIAN ECONOMIC SCENARIO

India is among the top 15 countries in the global economy in terms of GDP at current prices.

9.6 9.3

6.8 8.0 8.6

15 15 13

14

17

6.5

4.8

8.0

3.6

9.4

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2007 2008 2009 2010 2011

GDP growth PCI growth Infla:on (WPI)

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4



§  The Global Wire and Cable Industry in 2009 dipped by 22.8% compared to 2008 due to global financial turmoil.

§  The Global cable market is dominated by China with a backdrop of China’s stupendous annual growth rate of 13% in

the power sector between 2000 to 2008, the Chinese Cable Manufacturers achieved an exponential growth curve which

has enabled them to gain a preponderant position in the world market.

§  The global power cable market shall be majorly steered by Asian and European nations for the next 5 years on

account of exponential growth in sectors like infrastructure projects and power generation.

GLOBAL CABLE & WIRE MARKET

The global cable & wire market is expected to grow at a CAGR of 9.4% to reach nearly $ 200 billion by 2015.

Source: BCC Research

The World Cable & Wire

consumption for the year

2008 was at 1,64,72,000

tonnes. 0

50,000

100,000

150,000

200,000

2008 2009 2010 2015

$ Millions

The Global Cable Market (2008-‐2015)

Power Cable Telecom Cable


§  The Indian Cable Industry has been playing a crucial role by supporting the growth of the Power Sector for over 60

years.

§  Industry is fully established for all types of cables from 1.1 kV and developing for EHV cables up to 220kV.

§  There exists more than 25 major power cable companies in the organized sector and over 600 medium & small units.

§  Major manufacturers have undertaken expansion for additional capacity through brown field as well as green field.

§  The Industry has kept pace by continuously upgrading the technology to meet the technical demand from the Power

Sector.

INDIAN CABLE & WIRE MARKET

Source: Bloomberg Database & Havells

The Indian cable & wire market is expected to grow at a CAGR of 25% for the next five years.

-

2,000

4,000

6,000

8,000

2005 2006 2007 2008 2009

4,879 5,415 6,087

7,000 6,364

Mar

ket V

alue

(IN

R C

rore

s)

Year

INDIAN WIRE & CABLE INDUSTRY MARKET SIZE

There has been very limited

consolidation amongst the

major players in the Indian

cable industry.

0

5,000

10,000

15,000

2006 2007 2008 2009 2010

5,415 6,087 7,000 6,364

12,000

Market V

alue

(INR Crores)

Year

INDIAN WIRE & CABLE INDUSTRY SIZE


GROWTH DRIVERS FOR POWER CABLES IN INDIA

The major sector contributing to the growth of cable industry is the Power sector.

The Indian Cable Industry has been playing a crucial role and dedicatedly serving the Nation by supporting the

growth of the Power Sector for over 60 years. It is envisaged that the Power Sector Growth – especially

in the Transmission & Distribution Segment would soon trigger an Explosion in Demand for Cables.

The Industry has kept pace by continuously upgrading the technology to meet the technical demand from the

Power Sector.

In consonance with the Power Development Programme the Industry has been augmenting its capacity to meet

the projected demand-supply gap.

The industry had to pass through many traumatic phases due to cyclical recessions arising from the slippages

in the projected Power sector targets.

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8



UNDERSTANDING POWER CABLES

The EHV, LV and MV/HV contributes 10%, 65% and 25% respectively in India.

Electric Cables

Power Cable Light Duty Cable

Extra High Voltage Power Cable

Low Voltage Cable Power/Control/ Instrumentation

High Voltage/ Medium Voltage Building Wire

Automobile LAN/Co-Ax

Winding Wire

Elastometric Cable


§ The Indian power sector is growing at 1.8 to 2 times of the GDP, translating to an addition of generation capacity by

nearly 18,000 to 20,000 MW (megawatts) each year.

§  Power cables play a crucial part in all the three aspects of the power sector – generation, transmission and distribution.

§  Nearly 3-3.5% of investment in Power Sector per MW goes towards Power Cables.

§  The Planning Commission of India (PCI) has proposed capacity addition of almost 78,000 MW during the Eleventh plan

(2007-2012), translating as opportunities in the range of INR 103 Billion to INR 120 Billion.

Source: Central Electricity Authority, 2011

USER INDUSTRY: POWER SECTOR

Power sector is expected to grow at a CAGR of 25% for the next five years.

11th Plan (2007-‐2012)

GeneraIon: Rs. 3,43,000 Cr

Transmission: Rs. 1,29,300 Cr

DistribuIon: Rs. 1,44,300 Cr

11th Plan (2007-2012)

Generation: Rs. 3,43,000 Cr

Transmission: Rs. 1,29,300 Cr

Distribution: Rs. 1,44,300 Cr

Total Outlay: INR 6,16,600 Crores

500

550

600

650

700

2006 2007 2008 2009 2010

586 613 619

648 670

Electricity

Con

sump;

on

(Units)

Year

INDIA’S PER CAPITA ELECTRICITY CONSUMPTION (IN KWH)

•  Investments in the industrial sector, comprising

of buildings, factories, and industrial units across

various sectors such as steel, power, fertilizers,

oil & refinery, aluminum, cement, mining, among

others, also generate demand for power cables

(both low and high tension cables).

•  It is estimated that nearly 2% to 2.5% of the

total capex plans goes towards power cables.

•  With Indian corporates estimated to spend

around USD 150 to USD 200 Billion as capex

over the next few years, the demand for cables

from the sector is expected to be high.


•  Cables are the backbone of the communication

sector.

•  India is the fastest growing telecom market in

the world adding nearly 18 million subscribers

every month.

•  In addition, with the government estimated to

contribute nearly INR 18 Billion towards the

Universal Service Obligations (USO) fund on an

annual basis.

•  the demand for telecom infrastructure, including

cables is expected to remain strong.

•  The telecom services industry registered a

growth of 20.7 percent clocking revenues of Rs.1,

57,542 crore in 2008-09 compared to Rs.1,

30,561 crore in 2007-08.

USER INDUSTRY: TELECOMMUNICATIONS & INDUSTRIAL

INDUSTRIAL SECTOR TELECOMMUNICATIONS SECTOR

The Telecom and Industrial sector are the upcoming user industries for Power cables in India.

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12



Sr. No Name Sales Turnover 2010

(Rs. crore)

1 Finolex 1,726.59

2 KEI Industries 909.24

3 Delton Cables 150.96

4 Diamond Cables 735.41

5 Paramount Cables Ltd. 368.54

6 Havells India 1010.53

7 Universal Cables Ltd. 527.61 8 Torrent Cables 186.54 9 RPG Cabled Ltd. 385.06 (2009)

10 Central Cables Ltd. 32.73 (2009)

11 Orient Cables India Pvt. Ltd. 18.1 (2009) 12 CapCab Cables 32.03 (2009) 13 Gemscab Ltd. 212 (2009)

COMPETITION ANALYSIS

The Indian cable industry is highly fragmented with a very large number of cable producers – many hundreds of

companies – a larger total than can be found in any other country in the world except China.

There exist over 15 power cable companies in the organized sector and over 600 medium and small units in India..

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14


BiG Strategic Management Consultants 15

ABOUT US

Foundation Ø  BIG Strategic Management Consultants, established in 2008, is a fusion of the vast experience of industry

veterans and its synergy with the young blood, which blends to give superior consulting services to both domestic

and international clients in fields as diverse as strategic consulting, technology consulting, financial consulting,

market research and analysis, feasibility studies and manpower planning. Our Goal Ø  To exceed the expectations of every client by providing outstanding services which are timely, accurate and

innovative.

Our Associates Ø  Are distinguished by their functional and technical expertise along with their hands-on experience, thereby

rendering the most effective and professional service.

Our Services help clients Ø  Define new areas of businesses.

Ø  Give a competitive edge to current and new businesses.

Ø  Service with inventive business solutions which are realistic and achievable.


OUR SERVICES

Ø  The regional exposure has a reach in Asia-Pacific, Middle East and Europe.

Ø The various industries covered by the panel are divided into 3 different sectors covering the various industries as

mentioned below. A - Government Departments and Organizations

(Policy Formulations, Organization Redesign, Impact Assessment Studies)

B – Manufacturing Industry

(Automotive,Chemicals,Consumer Goods, Food & Beverage, Pharmaceuticals, Textiles, Cement,Building

Materials)

C - Service Industry

(Advertising, Financial Services, Banking & Insurance, Media and Telecom, Healthcare, Hospitality, Transportation

& Logistics, Travel & Tourism, Aviation, Shipping)

D – Miscellaneous Industry

(Agriculture, Construction and Real Estate, Power and Water, Oil and Gas, Infrastructure)


HOW CAN HELP? G

RO

WTH

Understanding the Current Power Cable Industry in KSA.

Market Research for foraying into new Business Segments and Technology Upgradation.

Techno-Economic Analysis of New Business Segments & Leveraging Traditional approach with Modern Technology.

Competitive Positioning and Acquiring Larger Market Share

IDENTIFICATION & VALUATION

STUDIES

Process Study

Cost Optimization Studies


CONTACT US

Middle East

India

Mr. Makarand Pa:l Consul:ng Director BIG Strategic Management Consultants P.O. Box 29815 Dubai, UAE Tel:-‐ 00971-‐44-‐4315672 Fax:-‐ 00971-‐44-‐4315673 Mob:-‐ 00971 55 8803641 Email:-‐ makarand@big-‐consultants.com

Mr. Md. Gulrez Iqbal Associate Consultant BIG Strategic Management Consultants 3. Hindustan Kohinoor Complex, L.B.S. Road, Vikhroli West, Mumbai 400083, India Tel:-‐ 0091-‐22-‐67427823 Fax:-‐ 0091-‐22-‐67427830 Mob:-‐ 0091-‐8767106409 Email:-‐ gulrez@big-‐consultants.com

Thank You


indian power cables industry

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