KEI Industries Plans Wires CapEX at Silvassa
KEI Industries Ltd. is one of India’s leading players of wires and cable, manufacturing from past 50 years. KEI Industries manufactures a wide range of cables and wires such as- high and low tension cables (EH, HT & LT), control and instrumentation cables, stainless steel wires and more.
As per KEI‘s Q2 FY2019 Invester / Earnings conference call they were operating house wire capacities almost at 100% level. So to grow its share of the house/ building/ flexible wire market, KEI has planned for a new capex plant for House Wire/ Building Wire/ Flexible Wire at Silvassa, Dadra and Nagar Haveli.
Wires Expansion Plans
On 12th November 2018, Anil gupta M.D and Chairman of KEI Industries said in a TV interview “The investment for the first phase of the plant shall be around 55 – 60 Cr. out of which 25 Cr. is being spend on land and building.” He also told that “The order of machines were placed few months back, the first phase of the project which will create an additional capacity of 3,00,000 km of wires per annum. The plant will be operational by march 2019 and will add a revenue of Rs. 300 Cr. in full year from the next financial year.” He also mentioned “The second phase of the expansion shall also be carried out in the year 2019 -2020. It will take another 6 to 8 months, expected to complete by September-October 2019.” The company plans to investment around Rs. 30 Cr. in phase II, which will add another 3,00,000 km of capacity and Rs 300 Cr. revenue at full capacity.
Almost Doubling of Wires Business Expected by FY21
According to the companies Annual Report 2017-18, the cumulative capacity of winding, flexible and house wires is 6,77,000 kms from four plants located at Bhiwadi (Rajasthan), Chopanki (Rajasthan), Silvassa (Dadra and Nagar Haveli), and Pathredi (Rajasthan). As per the expansion plan after adding 6,00,000 kms from both the phases, the new capacity of the house/ flexible/ building wires shall be 1,277,000 kms. Indicating an increase of 88.6 % in the capacity of the subjected wires.
As per the same report, KEI retail sales achieved a strong growth of 40% year-on-year to reach 1,086 Crore in FY 2017-18. 32% of the total revenue in FY 2017-18 was driven by the retail segment as compared to 29% in the previous year. KEI has added 137 dealers to there network, taking the distribution strength to 1,284.
According to the company’s Annual Report 2017-18, the winding wires, flexible & house wires contributed a turnover of Rs. 602.38 Cr. as compared to Rs. 444.88 Cr. in FY 2016-17, showing a growth of 35.40%. Anil Gupta Said in the article of Energetica- India in January 2019, “We expect a potential growth in our house wire segment, with the new affordable housing schemes coming up and with a rise in the real estate business”.
It is expected that after completion of both the expansion phases for house / building wires KEI should be able to do INR 1,200 Cr. annually in this segment by FY 21.
The other dominant players in the Indian House/ Flexible/ Building wire market are Polycab Wires Pvt. Ltd., Havells India Ltd., Finolex Cables Ltd., RR Kabel Ltd., Universal Cables Ltd., and Anchor. In fiscal year 2019 the House/ Flexible/ Building wire industry is estimated to have grown at 12-15% and is expected to continue to grow at a healthy rate over the medium term.
This article is written with some inputs from Energetica.
