Financial Daily from THE HINDU group of publications
Saturday, Jun 19, 2004
Finolex plans switchover to making light duty cables
Pune , June 18
REDUCTION in the off take of JFTC (jelly filled telephone cables) in the country have made the Pune-based Finolex Cables Ltd (FCL), decide to modify their existing JFTC lines to produce LDC (light duty cables), particularly automobile cable required by wiring harness manufacturers for their local and export requirements.
Mr P.P. Chhabria, Chairman, Finolex Cables Ltd, told Business Line that decrease in off take has been observed during the last couple of years. JFTC had been a substantial contributor to the revenue of the company and a couple of years ago it was valued at close to Rs 2,500 crore.
Now the requirement was only about Rs 500 crore of which FCL had obtained orders worth Rs 90 crore for the fiscal ended March 2004. The main takers for the JFTC include the BSNL and MTNL.
He said the modification would also add production capacity for new generation communication cables. Accordingly, it has been decided to remodel the Urse factory for the production of new types of cables for which work was in progress.
He said minimal investment would be required. He however pointed out that this modification would in no way alter the ability of the lines to produce JFTC as they would continue to manufacture this product for the export market.
He noted that the export requirement of JFTC, especially for the foam skin type of cables was on the increase and these cables had ready buyers in the Gulf and in the African countries. FCL is the only company to manufacture such types of cables in the country.
Mr Chhabria said the new generation of communication cables proposed on the modified JFTC lines, belonged to the family of LAN cables and coaxial cables. This found application in multimedia networks and broadband services.
Keeping in view the increasing demand for such type of products, he said it has developed a CAT-6E cables using star shaped separator for local area network.
Asked about the optic fibre project, Mr Chhabria said the commissioning of the first phase of the project has been currently put on hold. This was due to techno-commercial issues outstanding between FCL and the supplier of the equipment, he said. The matter has been referred to arbitration for resolution and a solution is expected soon, he said.
The company has so far invested close to Rs 94 crore for this project and once these issues are sorted out, the commissioning would happen in the next six months.
Mr Chhabria said the company has recorded a growth of 16 per cent for the first two months of the current fiscal. It has registered a total income of Rs 90.5 crore for the first two months of the current fiscal as against Rs 77.9 crore recorded for the corresponding period last year. He noted that FCL has started supplying JFTC to BSNL against the order of 1,081 TCKM (thousand crore kilometres). The board of directors has recommended a dividend of 40 per cent and the total dividend outgo (including dividend tad would be Rs 13.80 crore.
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