BUILDING BRAND INDIA
POLYCAB in Joint Venture with
world’s largest Cable Maker NEXANS
THE 4 LIVE WIRES OF POLYCAB
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In Vol-5 issue 3 Sindhishaan had done a feature on Polycab Cables and Wires. In this issue Sindhishaan gives details about the recent steps taken in their dynamic growth story.
Polycab Wires Pvt. Ltd – Asia's top branded and largest wire and cable manufacturing company was started by the four Jaisinghani brothers – Girdhari, Inder, Ajay and Ramesh. From a modest beginning in 1972, today the Polycab group is a name to reckon within the wires and cable industry, exporting to countries in Africa, the Middle East, Far East and also to other parts of the globe. In fact it is the first and only company in India to have supplied material to the U.K. market under its own brand name.
Polycab is excited about the future. Its sales have grown impressively from Rs. 1,575 crores in 2005-2006 to Rs. 2,100 crores in the following year, and are expected to touch Rs. 2,600 crores by end of this financial. What's more, it has recently sewn up a 50 : 50 joint venture with the world's largest cable maker Nexans – a partnership that envisages investments of Rs. 320 crores.
France based Nexans, was spun out of Alcatel in 2001, and has manufacturing operations in 30 countries with a turnover of over Rs. 45,000 crores. Polycab's joint venture with Nexans is going to catapult it into yet another growth trajectory.
Speaking about the tie-up, Inder Jaishinghani, Polycab's Chairman and Managaing Director, says, “We are elated to have tied-up with Nexans which is a global leader in cables. While Polycab has a strong market presence in India, Nexans' technical expertise will make our partnership a force to reckon with. This collaboration will enable us to power the future.”
According to Jaisinghani, the joint venture company Nexans Polycab Pvt. Ltd. will manufacture specialty cables like elastomeric and extra high voltage cables (EHV) that are currently not manufactured by Polycab. The first phase of manufacturing under this joint-venture, of elastomeric cables at Daman, is expected to commence in the first quarter of 2009 with an investment of Rs. 150 crores. The second phase, which would involve another Rs. 170 crores, will see the setting up of a unit in Gujarat to manufacture EHV cables. Nexans Polycab is targeting a turnover of Rs. 300 crores by 2011.
Claiming to be the fastest growing cables company in the country, Jaisinghani says that the vision of the company, to consistently invest in technology and plant and equipment well in advance, has been the reason for its success. “We have witnessed immense growth over the last couple of years. Our infrastructure and technical superiority have been the reason for this rapid growth.”
Today Polycab's manufacturing muscle consists of a state-of-the-art plant at Daman spread across 100 acres of land, totaling ten facilities. These plants employ 1,500 people and produce over 10,000 km of cables and 150,000 km of wires each month with a capacity utilization of almost 100%. “All our plants are ISO 9001 : 2000 certified, and our entire range of wires and cables conform to national and international standards and specifications, like the BIS, IEC, VDE and BS, as also to customer's own specifications and special technical requirements,” Jaisinghani asserts.
The motivation behind joining hands with Nexans is, clearly, the opportunity to straddle the entire spectrum of the cable industry, since fresh rounds of investment are going to be made by the government with the launch of its 'Power for All by 2012' programme. “This programme envisages the increase in power generation capacity by almost 2.25 times in the next 10 years. Moreover, the setting up of new plants and new housing projects in practically every district of the country is going to release pent up demand for cables and wires.”
The company's distribution network is equally impressive, and also indicative of its focus on retail business. Jaisinghani informs that Polycab products are retailed through nearly 10,000 outlets, which are serviced by 300 authorized distributors and dealers. “We derive nearly 60% of our business through the dealer route, and the balance 40% comes from institutional sales.”
R S Vaidyanathan (vaidyanathan@polycab.com), CEO of the company, elaborates, “We can assure you that our products are available at least in one outlet every 5 square km in the country.” He says that, “While the supply chain is already pretty strong with a factory-warehouse, in all four metros 4 additional warehouses are being set up and another 4 in mini metros. In any case, we always hold an inventory of over Rs. 50 crores of standard cables at any given time, to cater to sudden demand. Interestingly, despite being a market leader, the company still gets the lion's share of its business from western and southern regions. And this is an anomaly it is hoping to correct by strengthening its reach and network in the north and east too.”
Polycab's trade initiative is not just limited to identifying potential markets. It has also worked out elaborate educational and product awareness programmes which are conducted for the benefit of electrical contractors, dealers, consultants and specifiers. “To further disseminate information about our new products and developments in the company, we have recently launched the first edition of Polycab Current. This is a newsletter that helps us maintain close contact with our customers and trade partners,” explains Vaidyanathan.
Even the export front hasn't been left unattended. Overseas business has been growing at a rapid clip, particularly over the last two years when exports more than doubled to Rs. 168 crores. “We are expecting export sales to touch Rs. 315 crores in the current fiscal, which make them nearly 15% of our total business,” asserts Jainsinghani.
