Pune-based Finolex Cables Ltd has charted out a course for the next few years that will completely change its identity. With plans of setting up a new unit to manufacture electrical equipment such as motors and transformers, the company plans to change its 50-odd-year legacy of being a manufacturer of cables to being a player in the electrical products business. Managing Director Deepak Chhabria, who takes over as Executive Chairman on July 1, spoke to Business Line about the company’s growth targets and its diversification plans. Excerpts:

What is your vision for Finolex Cables in the years ahead?

We would like to diversify and change from being a cables company into an electrical products company. Our strategy is to have a broad-based product range, and multiple products in each category.

A new plant will be set up in Gujarat that will make, to begin with, products like electric motors and transformers. Negotiations are under way to acquire around 30-50 acres near Baroda for this. The investment will be around Rs 100 crore and we expect to have this running by FY15. We plan to set up a separate dealer network for these products.

Finolex will also set up a new switchgear division this fiscal that will initially make miniature circuit breakers. The investment for this is still being finalised.

What are the new initiatives at your Urse plant?

We used (50:50) JV partner Corning’s technology to augment capacity from 1.2 million (optical) fibre km to 2 million fibre km with our existing equipment. Under our JV agreement, all further requirements of optic fibre beyond this will be met by purchases from Corning. Its new plant at Chakan recently started production. Last week, we participated in the tender for the National Optic Fibre Network project to connect all village panchayats. This is a 4,00,000-cable km project that can go up to even 8,00,000-cable km. To prepare (for this), we have expanded our current cable capacity at Urse and Goa from 6,000 km-a-month to 8,000, and will further expand to 10,000 in four months’ time.

The Board has also just approved setting up a 5-MW solar plant that will entail expenditure of Rs 40 crore and be implemented over the next six months. We consume around 7.5 MW at Urse, so this will be for captive consumption.

What is the progress on Finolex J-Power, your joint venture with J-Power Systems Corporation of Japan?

The JV plant at Shirwal to make extra high voltage cables went onstream last September. The total investment here is Rs 220 crore, including Rs 80 crore in equity. (Finolex holds 49 per cent in the JV, but has management control). We plan to export 80 per cent of the production, but for this, the products need to be type-approved and the process is on. Our first is a Rs 40-crore order from Maharashtra electricity distribution company.

At full capacity (in five years), we expect a turnover of Rs 1,800 crore from this unit.

Your target is to grow by around 40 per cent to over Rs 3,000 crore this year. How do you plan to achieve this?

In addition to expanding in fibre optics, we have invested Rs 60 crore to enhance capacity at Roorkee to two million electric cable coils a month. We are also focusing on the lighting division – we launched LEDs last month – and expect turnover from these and our range of CFLs to touch Rs 100 crore this year.

Our other plans include launching a third range of switches, and doubling revenue from exports.

(The new role of Deepak Chhabria has been corrected to Executive Chairman from Executive Director. The error is regretted.)

Related Topics
comment COMMENT NOW