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Indian Cable Sector Resumes Partial Operations among Challenges

Since the last week of March, Corona Virus pandemic spread and nation-wide lockdown was initiated in India. The lockdown put a sudden brake on all the manufacturing and industrial activity in India towards the end of the financial year. March is a revenue heavy month for the Indian Cable & Wire Industry. Thus the lockdown is expected to heavily impact balance sheets of Indian Cable manufacturers and their suppliers.

Now after a month, the Indian Government along with local administrations is cautiously allowing resumption of industrial activity with certain restrictions.

Many cable manufacturers such as Polycab, Ravin, Cords, KEI, Universal etc. have now resumed limited operations. These industries have been allowed to do so with proper permission and in sync with guidelines of the Central and state governments under supervision of local authorities.

Universal Cables Unistar logo

Universal Cables Ltd. was one of the first to resume operations in limited capacity on 07th April 2020, at its Satna, Madhya Pradesh manufacturing unit after procuring required permission from local administration. Universal’s Goa Unit opened subsequently on 8th April.

Polycab logo

Polycab India Ltd. which temporarily shut its operation on 23rd March 2020, commenced partial operations at its Halol plant in Gujarat and Daman plant from 21st April. Polycab further informed the exchanges today that its Nashik unit has also commenced partial operations.

KEI Industries logo

KEI Industries Ltd. on 23rd April 2020, informed the stock exchanges about resumption of partial operations at its three manufacturing plants in Bhiwadi, Chopanki and Pathredi in Dist. Alwar, Rajasthan and two units in Rakholi and Chinchapada in Dist. Silvasa- Dadra Nagar and Haveli.

Cords Cable logo

Cords Cable Industries Ltd., another major player in the Indian cable sector, resumed partial operations at its Chopanki unit from 25th April and Kahrani unit from 28th April 2020. Both factories are located in Dist. Alwar, Rajasthan. Cords, in its filing with the stock exchanges said that at present only partial operation are being commenced, which shall be ramped up in phased manner.

Aksh Optifibre logo

Aksh Optifibre Ltd. also resumed operations partially from 21st April. The company in its intimation to the exchanges on 21st April wrote “upon receipt of approval of concerned administrative authorities, Company, has partially resumed its manufacturing operations with limited manpower”. Aksh Optifibre has manufacturing facilities in Bhiwadi and Reengus in Rajasthan.

Finolex Cables logo

While Finolex Cables’ Pune and Urse plants are not operating, its Goa manufacturing facility is in operation. Also Ravin Cables and RR Kabel’s Pune manufacturing plants are operating on partial load.

Paramount Communications logo

Paramount Communications also resumed operations partially at its Khushkhera plant from 21st April as per information available. Operations of some other significant players like Thermo Cables in Hyderabad and Delton Cables in Faridabad are still shut as of this report. These organisations might take a call after review on 3rd May 2020.

Talking exclusively to on the situation Mr. Gaurav Sawhney, Cords Cable Industries Ltd. said “We have raw material stock at our factories sufficient for few days and simultaneously we are in touch with our suppliers to resume their operations too. Our first priority is employee safety and all the measures are in place to ensure that.”

“At the moment our target is to restart the operations and make it smooth. It would be ramped up in a phased manner adhering strictly to the guidelines of local administration, state and central government” he added.

Initial Challenges for the Indian Cable Industry in Resuming Operations

Most of the Cable and Wire manufacturers were demanding resumption of operations after the initial 21 days lockdown. Central and state governments from time to time issued various notifications in this regard which in itself created a lot of confusion initially.

Access to Manpower and Supervision Staff for Cable & Wire Operations

The final guidelines allow limited manpower, generally upto 30% of sanctioned strength with proper social distancing, sanitization, use of PPEs and medical insurance coverage. Also the workmen are to be provided food and accommodation inside the factory premises. The names of such workmen are to be registered with local authorities as well.

Another restriction on the factories is by way of limiting the number of persons (generally staff) that is allowed to travel locally to the unit. Example, Bhiwadi (Rajasthan), a major Cable Industry hub, has allowed only upto 1, 2 or 3 named employees on passes for small, medium and large units respectively. This itself has put a huge restriction on operations in the higher man-power oriented Indian context.

One highly controversial condition that has correctly been removed was to hold factory owners responsible alongwith registration of FIR under Pandemic Act in case of any Covid-19 positive cases among workers.

Cable Industry’s Challenge with Logistics

Lockdown has also seriously affected logistics, material supply chain and manpower availability. After resumption it has been the endeavour of industry to first resume despatches of finished goods that have been lying ready as well as movement of trucks that had been stranded at various places throughout the country since abrupt announcement of lockdown. Though a major challenge, logistics companies have been working actively and are generally able to support the industry in this regard.

The Raw Material Supply Situation

Generally supply of raw materials like base metals: Aluminium, Copper and Steel is sufficient with regards to current operations as most companies have stocks from March. Major suppliers like Vedanta, Hindalco, Balco are in operation as most of their production facilities are in green zones. Supply depots also have ample stock availability as sufficient material was not lifted in March.

Other important raw materials for Cable Industry are compounds and master batches. Although most cable manufacturers currently have some stock of these materials for limited ongoing backlog schedules, soon material supplies would need to be resumed. Major compound and masterbatch manufacturers are gradually resuming partially but are facing lot of difficulties due to disruption in their supply chains of critical chemicals.

In an exclusive conversation with Mr. Sushil Bihani, Founder and Chairman of Bihani Manufacturing Company Pvt. Ltd. commented “Although we have resumed operations but due to very low demand production is minimal. We are also facing lot of issues in procuring raw material as supply chain is totally disrupted.”

Cable Industry is among the backbone of any successful project. Sales are expected to improve once administrations lift severe restrictions on various project sites. Completion of previous orders is the present priority and a significant challenge for the Industry.

Overall, although the cable sector has been severely hurt by the Corona Pandemic, the sector is coming back online with gradually increasing production as well as some life in its sales operations.