The explosion of data centres and AI in the US and Europe has consumed all available fibre supply. Most capacities in China and Japan are blocked. The wars in Russia and the Middle East have led to a surge in demand from the defence sector. A similar scenario is expected in the Indian market as data centres are getting built out. Fibre prices in the Indian market have already gone up five to six times in the last year.
Finolex Cables CEO, Mahesh Vishwanathan, says fibre availability is a major issue and that there is no fibre available anywhere in the world. Against this backdrop, Finolex Cables is set to reap the benefits of the backward integration plan it has been implementing to become a fully integrated optical fibre manufacturer.
Vishwanathan says it is the right time to be in this industry, and the next few years will be a period of good growth. It places them among the handful of companies in the country to have such capabilities. Sterlite Technologies leads this market with the largest fully integrated manufacturing facility.
Finolex has been expanding its fibre capacity. Vishwanathan said the company is making a sizable investment in this and believes it will be ready to supply when the data centre market opens up.
Finolex recently commissioned the preform plant and should stabilise soon. The company is also expanding fibre draw capacity, and it will be completed this month. Finolex has set up a 100-metric-tonne preform plant that will be operational by the end of July. The preform will be consumed internally.
The company is in the process of adding another 100 metric tonnes of preform plant, which will take its capacity to 200 MT. A 100-tonne glass plant would translate into 4 million km of fibre. Finolex is doubling its optical fibre cable capacity to eight million fibre kilometres.
This expansion will help Finolex grow its communication cable business to Rs 750 crore from around Rs 500 crore at present. The demand for high-capacity cables is growing. Demand is coming from data centres, telecom and military applications.
According to Vishwanathan, the preform plant will give the company control over the raw material and enable it to participate in highly competitive tenders. It will have the flexibility to use a preform. It can be converted into fibre, then into fibre cable, and sold, as per demand.