Ravin Cables : Benchmarking the technology excellence
Mr. Vijay Karia - Managing Director
Ravin Cables Ltd.
Q. Indian electrical and the electronics industry possess incredible power to improve the overall standard of living in the country, Please, brief us about recent initiatives undertaken in electrical industry? Which are your focus areas?
We at RCL(Ravin Cables Ltd) believe that the Indian Electrical and Electronics industry does have the power as well as the ability to improve the overall standard of living, as well as positively impact the GDP growth as well as the overall growth of the Country. We people, who stay in the cities and enjoy all the amenities of life, cannot imagine a world without electricity. However, it is ironical that if we go to the interiors, i.e. less than 4 hours drive from any city or town, we will find that there is a problem of electricity.
India has more than 50% of the villages non electrified and even those which are electrified have continuous power supply problems. There is a huge deficit of power in our country, and though the Govt is ambitiously targeting “Power for all by 2012”, it might remain an ambitious and wishful target if the entire industry does not work hand in hand with the Govt. The facts are that we have huge T&D losses, huge thefts of electricity, problems of safety of electrical installations, or old and outdated equipment, especially cables and conductors.
We realize that unless we do not move to replacing these old cables, as also above ground conductors with underground cables, at least in the cities and towns, we will be moving in circles. And will not be moving towards solutions.So also, we realize that of the entire electrical segment, the cable and conductor segment is the largest segment, constituting more than 35% of the entire electrical industry. With this responsibility on us, we need to act in consonance with what is best for the industry as well as country.
So in order to act according to the demands of the time, as a corporate we decided we needed to shoulder more responsibility of the cable industry as well as industrial segment. We realized that as a quality player in the market, we needed to look to improve various aspects and facets of the industry. So we have been working in that direction relentlessly.
So about 3 years ago, I took over the Chairmanship of Cable Division of IEEMA, and since then have tried to initiate a lot of changes in the working of the industry. IEEMA as you know is the largest body of the Electrical and Electronics manufacturers in India. We have tried to make a lot of positive changes in the working, by creating an interface with the customer and the industry. We have had two very successful Cable Conclaves, the last of which was in December 2009. Our efforts have been to inform the various utilities, governmental bodies, industries and users on the technological progresses made by the industry. We have had lots of direct interactions with the utilities/ government bodies, organising special training programs, exhibitions, meetings etc. These interactions help the government in framing policies as well as the industry to gear up for the for countries inclusive growth thus improving the overall standard of living for e.g. The interactions with the Bureau of Energy efficiency and the industry personnel have resulted in the star rating program promoted today by the Government of India which has resulted in savings of electricity. The usage of CFL’s instead of the incandescent lamps and florescent tubes has helped the customers to save on their electricity bills.
Our focus areas have been upgradation of quality of products, as well as better reliability, in order to reduce T&D losses, R&D and better customer service. We are also advocating usage of underground cabling systems instead of the overhead system for transmission and distribution as a means to reduce the T&D losses, as well as increase safety of the citizens.
Q. What are the growth opportunities for electrical cable industry in India? Being the key player how do you plan to position your company in electrical cable sector?
The electrical Cable sector is one of the most important sectors of the electrical industry. The cable is the lifeline or the connection between all electrical equipments. Without a cable, you cannot do anything with electricity.With rapid urbanization there is a huge demand for power in cities. There are right of way issues makes it impossible for laying over head transmission lines. This has necessitated the usage of underground cable network in cities whilst in rural areas to avoid the theft problems overhead conductors are being replaced by Aerial bunched cables. Further, the High voltage distribution system ensures reduced T&D losses hence cables of higher voltage grades are now becoming more popular in distribution networks.
The Indian cable industry is in its nascent stage for High Voltage cable manufacturing whilst adequate capacity exists in cables upto 33KV application. Ravin Cables is an industry leader and has been instrumental in launching new improved technologies in India due to its international exposure in more than 43 countries. We are known as a quality brand in the market and have addressed a lot of customer problems by making constructional changes in cables and using different raw materials. RCL will continue to innovate and be a leader in the electrical cable segment by launching newer improved products from time to time which will be beneficial in reducing the overall T&D losses of the utilities.
RCL will always try and maintain its position as the largest exporter of Power cables from India. We are looking to a joint venture with the largest and most reputed cable company in the world to take the technology to advancements, hitherto not seen in India. We look to ourselves not only to be promoting and propagating excellence in all segments of manufacture and marketing, but we also believe that we shall become one of India’s first “complete” power infrastructure company, with end to end specialized solutions which will not only be the most technically and technologically advanced solutions, but will also be cost effective in terms of value for money. We say that cables should not be looked as a “Capital item” but should be looked as “Revenue saving item”.
Q. As per your opinion what is the role of research & development in product performance? How do you score R&D in your company against all other functional heads?
R&D is the backbone of any successful organisation. RCL has a strong R&D team which helps the company to provide solutions to customers ever growing field problems by incorporating changes in the construction and materials. The new materials and improvement in compounding techniques help in reducing costs. New machines improve the output as well as improve the quality of the product. Investments in R&D has always helped RCL to stay ahead of competition and be a market leader providing quality products. We were the first cable company in India to propagate XLPE cables by selling them at same price of PVC cables. Though we had to do a lot of hard work for marketing this concept, we are happy that we have been very successful as today more than 80% of the low voltage cables used in India are XLPE cables. We have also been advocating the usage of optimum number of strands in the conductors, to reduce losses.
We have als pioneered the concept of using PP fillers in the Low and medium voltage cables which is light in weight and fills the interstices of the core assembly fully making it impossible for liquids to enter the cores area through capillary action. Further it being a non-hygroscopic material, it also acts as a radial moisture barrier. The overall diameter and weight of the cable reduces due to usage of the PP fillers instead of the conventional PVC fillers which were used earlier. This concept is fast catching on with most of the quality conscious customers and utilities, who now insist on having their cables filled with PP fillers and tape.
Q. Indian market is price sensitive, what is your marketing strategy for India to counter this situation?
The Indian market, like any other market is price sensitive. However, our view is that a cheaper product does not mean a price saving for the customer. The customer might be paying through his nose, year on year, month on month, week on week for using a product that might be cheaper in terms of initial costs, but will prove to be much more expensive in a matter of 3 to 5 years. Remember that the life of a cable is supposed to be at least 30 to 40 years, under good operating conditions. And if you have installed a product that has lower initial cost, but is having higher transmission losses, either due to poor quality of the raw materials used or due to a badly engineered product, then you will be paying 10% higher electricity bill each month. Compare that with the cost of the cable and you come to the conclusion that a good product will pay for itself in a matter of 12 to 24 months, and that a bad product will make you pay for a lifetime. And it will be a silent killer, without you even knowing about it!!!!!!!
We always have looked to supplying products at the right price to our customers. Electrical cables are assembled, using products manufactured by primary producers of metals & polymer. The pricing is guided by the fluctuations in the raw material prices of metals and oil. RCL provides the customers with an option of taking the products at a variable price to take the advantage of the variation in the pricing. It has been the policy of RCL to price its products at the justified right price in the market without compromising the quality of the products, and at the same time ensure that the products pay for themselves over a 5 year capitalization period.
Q. What is your quality policy for the business?
Our quality policy is simple. Excellence in all areas. Our quality stems from its core by purchasing the best virgin raw materials, maintaining the best process parameters while manufacturing, quality checks at the raw material, in-process and finished goods stages, maintaining a zero defect culture giving our customers the best possible products and services at the most competitive prices as per the agreed standards and within the stipulated time frame. We do not compromise on our ethics and Principles of business. After all, we have a 6 decade tradition to uphold!!!! Added to that, we have the responsibility towards our JV partners, who are having an even bigger reputation to uphold. We also have The Govt of Fujairah as our partners in the UAE, and so are very cautious not only about the quality of the products that we supply, but also the services associated with the product. For us, our customer gets preference over everything else.
Q. Please elucidate the export performance of Indian electrical products? What is the demand scenario of Indian products in global market?
The Indian electrical industry’s exposure in the international market prior to the liberalization of economy in 1991 had been limited, but not zero, as it was traditionally a local demand driven industry. Cable industry had started exports, when the rest of the electrical industry was importing products. These were exports to the erstwhile USSR under the food for oil programme. Subsequent to this, RCL was the first company to start export of Power cables from year 2000, and from that time, we have been winning the coveted title of “Largest Exporter of Power Cables” from India, year upon year. Today, exports constitute nearly 40% of our sales. When we started exports, Indian products, especially cables were not acceptable in the world markets. And we have come a long way since then, to be now classified as “preferred vendor”.
All segments of the Indian industry, especially the software sector has played a very important role in this acceptance of Indian products. However, we have a long way to go as an industry or even as a country. One must say that IEEMA’s efforts in the promotion of Indian Electrical Industry abroad has been very immense. They have participated in trade shows and organised delegations of the industry leaders to the middle east, African, European and Latin American countries. IEEMA’s efforts through various governmental forums and industry forums have helped Indian electrical industry to tap the business potential in these countries and impress on the capability of the Indian manufacturers to manufacture products as per the international standards.
The demand for all products across segments has taken a beating with the global turmoil since October 2008. The Indian electrical industry is also affected by the sudden melt down. The effects were compounded with the middle east turmoil which traditionally has been the bigger market for Indian goods. However, the same is now improving and we are seeing the signs of recovery though at a slow pace.
Q. What are the key technological trends that are driving electrical cable industry?
It is believed that by 2030, the urban population in India will be around 350million. This will put in a lot of strain on the major cities in India and consequently the demand for water and power will be a big challenge. Even if power is available, the transmission of the same in cities will necessarily have to be underground transmission system. This will open a lot of challenges for the Indian cable industry which will see a lot of changes and opportunities for High Voltage Distribution system. The demand in all the major cities will be for EHV cabling system whilst the trans-country systems will continue to be overhead systems. The above is also coupled with the fact that India is projected as the major destination for the world’s manufacturing hub. The rapid industrialization will lead to heavy demand in industrial Power cables. We will hence see a lot of investments in the up-gradation of technologies among the existing players as well as overseas global players setting up shops bringing in new technologies. There has been a lot of research in the polymer technology and the usage of advance polymeric materials like polypropylene will find way in the usage as insulating material in cables. Some of the new technologies which are making waves are superconductor cables, submarine cables and solid conductor cables for higher sizes in EHV range.
Q. According to you what are the measures taken by Indian manufacturers in order to compete with global players?
The Indian cable manufacturers largely work on the economy of scale models. We foresee a lot of consolidation in the industry with global players coming to India with improved technological products and at the same time Indian companies with its low manufacturing costs becoming a global player in the lower technology products. However, there are few companies like ours who are changing the technologies and investing in R&D to keep pace with the international players. We are the first Indian cable company to set up a green field project in Fujairah, UAE in partnership with the Government of Fujairah, UAE thus making our mark as a truly Indian multinational. Ravin Cables today is present in forty three countries world wide. We will continue to work in the improvement of technology and providing service to the customers.
Q. How do your foresee the future of the Indian electrical industry?
The government is putting a lot of emphasis on infrastructure development. For the Indian Economy at to grow at 8 to 9%, the electrical sector will have to grow at a minimum of 14% to 15% on a YOY basis.The electrical sector in China for eg grows at 1.5 times the GDP. With the growing demand of electricity and the increase in generation capacities as per the XI and XII plan to be met, there will be a great emphasis ahead for quality and optimum pricing, which will have to be addressed by the entire electrical industry.India will have to replace a lot of its old and antiquated electrical systems, especially cables and conductors. We foresee a lot of changes in the composition and the working of the entire cable industry and, and we realize that RCL in particular will have to play a very proactive and visionary role in this segment, due to our exposure to the international segment as well as being a market leader.We see the future to be the specialized cable segment, consisting of EHV cables, Oil and gas exploration cables, submarine cables, specialized transport sector cables, EHV joints and terminations, as well as specialized sector specific cables to be picking up in next 2 to 3 years time. We are prepared for this and are constantly upgrading our manufacturing capabilities both in India and in the UAE . We have big expansion plans in India going on stream shortly.
Q. Please elucidate the product portfolio of your company & do have any plans to launch new products in the market in near future?
We currently manufacture PVC/XLPE low voltage, medium voltage cables upto 33KV in India and EHV cables upto 220KV in our JV plant in UAE. RCL is the only Indian cable company to have the capability to manufacture cables to various international specifications like BS, IEC, VDE, ANZ, IEEE etc. We also manufacture ABC cables, special application cables, control cables, instrumentation cables, etc. RCL today is a one stop shop for cables and cable accessories from concept to commissioning. RCL does not just manufacture cables, but also provides the best of the cable accessories from Elastimold, USA thru their JV company in Egypt and a Universal joint solution from Lovink, Holland for transition jointing system.
RCL is also providing moisture draw-out systems for power transformers manufactured by TRANSEC, UK and fault passage indicators from Nortroll of Norway. RCL also provides turnkey solutions for EHV cables and accessories. It has already executed prestigious projects for Reliance Infrastructure, NTPC-Bhillai, Mahagenco, MSETCL for 132 and 220KV cables and terminations to the entire satisfaction of the customers. We plan to launch its EHV cables shortly in the Indian market, as well as to manufacture speciality Oil and gas exploration cables, submarine cables, specialized transport sector cables, EHV joints and terminations, as well as specialized sector specific cables.
Q. What is your vision for your company?
Ravin Cables shall be a professional and cultured Indian multinational, with a large global presence. We shall be committed to total customer satisfaction and enhance shareholder value. We shall innovate, entrepreneurial and forward thinking organization looking to constant R&D and creating value and attaining global benchmarks. We shall form and nurture a culture of caring, trust, empowerment and constant learning while meeting expectations of employees, stakeholders and society. We look to be a leader in the electrical industry.
