Electrical cables maker KEI Industries plans to set up low and medium-voltage cables manufacturing plants in Africa and the West Asia to tap those growing markets where the company has already been distributing cables, said Anil Gupta, chairman & managing director.
The Rs 1,085-crore KEI holds around 10% market share in the Rs 15,000-crore Indian cables market. Earlier this month, KEI entered into a technological collaboration with Swiss firm Brugg Kables AG to make extra-high-voltage (EHV) cables with capacity of up to 220 kv in India. The Indian cable industry grows at a CAGR of 20-25%.
“Africa is a virgin market while there is enough potential in the West Asia due to its mounting oil & gas exploration,” Gupta said without disclosing the exact dates for the facilities to be commissioned. According to experts, setting up a low/medium-voltage cables manufacturing plant will cost about $20-25 million and can be commissioned in 15-18 months time. Anil Gupta has affirmed that there would be no equity participation in the proposed projects. KEI earns its 15% revenue from Africa and the West Asia.
The company plans to gain a major chunk in the EHV cable segment in India. It will start production of such cables at its Chopanki plant in Rajasthan by end of August 2010. EHV cables worth about Rs 400-crore were imported to India in 2008-09. Currently, there is demand for cables worth Rs 700-800 crore in the country, where the industry is growing at a CAGR of 35-40%.
“We are aiming at a share of Rs 300 crore in EHV cables market in initial years,” Gupta said. KEI has already invested Rs 110 crore in Chopanki plant and an additional Rs 40 crore will be pumped by 2010.
