How is the Indian market changing as far as the demand for electrical cables (LV, MV, and HV) are concerned?
At Polycab, we maintain strong oversight over economic and industry developments and megatrends that shape our opportunity landscape. With the increase in development and growth of the country, we are experiencing a new demand for cables from different key sectors.
In 2021, the total installed capacity for data centres in India is estimated to be 450 MW and with an increasing thirst for content delivery platforms for entertainment, ecommerce, education, and push for digital India, demand for data centres is increasing in the country. Hence, we saw a sharp incline in the demand for cables from data centres.
The second sector that is driving the demand for cables is the Indian renewable energy sector. With the largest expansion plan, it is the fourth most attractive renewable energy market in the world. Currently, India has a capacity of installed renewable energy production of over 150 GW, and investments in 2022 is likely to cross 1125 billion INR, making capacity to reach the goal of 175 GW. Up to 100%, FDI is allowed under the automatic route for renewable energy generation and distribution projects, triggering the demand for cables in the segment.
Also, with the increase in infrastructure development, the right of way comes into play. In populated areas, we are witnessing a growing need to replace the overhead transmission and distribution lines with underground cables to ensure safety. Private transmission & distribution utilities aren’t rigid with old standards and looking to adapt underground cabling with keener intent. This results in increasing demand for the cables segment.
What kind of safety features are finding growing demand in this market?
A cables’ performance can make a huge difference between a small accident and a dangerous mishap. Price used to be the most important factor that drives a purchase decision, but we are witnessing a change in customers’ buying behaviour in key sectors like metro rail and real estate.
In metros, fire safety is a huge concern. Cables with lower safety standards can contribute significantly to the spread of fire and heat emission, increased emission of toxic gases, and increased smoke emission. These factors make it difficult for safe evacuation and are the reason for most of the fatalities in such events.
To cater to this growing need, we came up with Polycab Fire Survival cables and the focus on quality, safety, and energy-saving features have worked well for the brand. Polycab fire survival cables are designed to withstand temperatures as high as 950-degree C. They can also maintain circuit integrity for a period of three hours for emergency safety circuits, water sprinkler systems, fire alarm systems, and emergency lighting circuits. They have a low toxicity index (5%) and high visibility index (95%). Polycab FS Cables are LPCB Certified, which is one of the most recognized certifications and is owned by only a handful of brands in the country.
To meet the latest demands of environmentally friendly cables with increased safety in the event of a fire, Polycab also offers a high range of product that provides Halogen-free environment which contributes to less corrosive gases and prevents the damage of human beings.
What’s your observation on the common factors that influence the purchase decisions – price or quality?
In the cables and wires segment, we deal with both the contractors and the end consumers, and the factors that influence the buying decisions are quite different for them. For our customers like contractors and consultants, the price of the product plays an important role. A majority of the requirement for our cables are given by the contractors who are mostly concerned by the L1 prices. Since the price at which these customers get the product makes a huge impact on their margins, other factors like technological advancement and life expectancy take the back seat.
When it comes to an end consumer, this game changes and we have observed that some of these customers provide due weightage to the quality of the product for making a purchase decision. Though factors like delivery time, MOQ still affect the decisions of these customers, customers be educated about the importance of using high-quality electrical products which will lower their operating cost and reduce downtime. Quality in terms of fire-related events, life expectancy, curing techniques, etc should be properly evaluated and cables with the best price to quality ratio should be used for greater satisfaction.
What is the USP (Unique Selling Proposition) for Polycab cables?
Polycab India Limited has a legacy of over 50 exceptional years marked by customer satisfaction and enabled by our focus on Quality, Service, and Timely deliveries. We make best-in-class wires and cables using cutting-edge technologies such as CCV, electron beam, etc and have the advanced Quality Assurance and Development laboratory to monitor in-process products and to develop new products. We are the only player in India with a private power cable test Laboratory, having the scope of 4,113 tests complying with all national as well as international standards.
Our leadership position in the industry is well augmented by our state-of-the-art manufacturing units having the capacity to produce 42 lacs km of wires and cables annually. We also maintain sufficient stock of our ready-to-stock SKUs, so that even in times of uncertainty we can serve the demand of the market within the desired time, making us the most reliable partner in the industry.
In FY21, we introduced 7 Polycab Experience Centres named “Polycab Galleria” to engage with diverse customer groups and enhance their shopping experience with audio-visual facilities. We stay focused on innovating to deliver better products and bring greater value to our customers, amplifying our value proposition year on year, helping us grow into the nation’s most preferred end-to-end electrical solutions brand.
What kind of priority do you attach on research & development to develop and launch new products?
R&D remains one of the key strengths of the Company which enables it to achieve product differentiation and offer a unique value proposition to its consumers, distribution, dealers as well as institutional customers. At Polycab, we undertake agile product and process innovations to stay on top of shifting market demands and aspirations of the customer. This necessitates continued investments in research facilities, processes, and talent, and enabled our leap onto new growth horizons.
Our state-of-the-art, in-house R&D centre is certified by the Department of Science and Industrial Research, Government of India. The R&D centre functions in tandem with the sales and market demand to support aspects of the research process and offer expertise in design, performance and project management.
During 2020-2021 alone, we spent 208 million INR on research and development, catering to the evolving market requirements like fire survival, fire- retardant, Low smoke and multi-chemical resistant compounds from sectors like real-estate, nuclear and industrial etc.
What are your actions to prevent climate deterioration?
Our products reflect a genuine sense of eco-consciousness and are produced using the most environment-friendly materials and processes, with the highest efforts to conserve energy and other key resources. We work to minimise resource wastage and maintain ecological balance. These efforts also extend to reusing and recycling the resources to the extent possible.
We have a focussed drive to efficiently manage water with prompt recycling for the purposes of gardening and sanitation. Our units are equipped with Sewage Treatment Plant to promote recovery, reuse and recycle water.
Polycab, as an ecologically responsible player, also utilise renewable sources of energy for daily operations. Presently, we are fulfilling over 10% of our total energy needs by renewable energy. We are continuously putting efforts to fulfill our maximums of energy needs from renewable sources only.
We have also taken on a robust waste management project in western India. This project involves a door-to-door collection of solid waste, transporting it to the nominated site, and recycling the same to produce products, which are marketed by the Gram Panchayat.
What would you like to communicate to your prospective buyers?
Polycab is a strong brand name in the Indian electrical space. We worked on developing new ranges of consumer-centric products, based on our deep understanding of the market and launched new products across categories.
We partner with the dealers and distributors to offer a wide gamut of products at affordable prices which cater to rising consumers’ aspirations. We manufacture a world-class range of wires and cables from House wires, industrial flexible wires, green wires to EHV Cables, Fire Survival Cables, Power and Control Cables, Instrumentation Cables, and Rubber cables. We cater to evolving market trends with our FMEG offerings from Fans and Lightning to IoT based automation offering- Hohm. Our strong backward integrated processes ensure a consistent supply of quality raw materials while in-house research and development capabilities help us earn national and international certifications
We would like to get more involved with our customers and end consumer hence we are coming up with more engagement programs this year. Our strategic decisions will be driven by customer-centricity, digital transformation, and a sharp focus on Environment, Sustainability, and Governance (ESG). Let us together make a difference and scale new heights of progress in the coming years.