Cable Industry

A REPORT

ON

FUTURE PROSPECT OF CABLE AND WIRE INDUSTRY

IN

THE INDIAN MARKET

BY

YOGESH CHANDAK

M.E.M. INDUSTRIES

A REPORT

ON

FUTURE PROSPECT OF CABLE AND WIRE INDUSTRY IN THE INDIAN MARKET

BY

YOGESH CHANDAK

ROLL NO.219

ROOM NO.13

SESSION: 2009~12

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF THE

ACADEMIC CURRICULAM

OF

ST. XAVIER’S COLLEGE

(KOLKATA)

Distribution list

1. Prof. Tridep Sengupta

Faculty Guide

St. Xavier’s College

2. Mr. Vishal Mohta

Company Guide

Director

M.E.M Industries

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Yogesh Chandak, a student of 3rd Year B.Com (M) Dept. of St. Xavier’s College

(Autonomous), Kolkata, having Roll No-219 has worked in Marketing Dept. of my Company and has

successfully completed his internship as required by the academic curriculum of St. Xavier’s College,

Kolkata.

The details of the internship are as follows:

Areas of work:

Attend business tradeshows Participate in marketing plans Create promotional materials Create sales presentations and present to prospects Assist with retail events Create displays Plan special events Work with clients Coordinate with internal departments to respond quickly to customer needs, requests and

problems

Duration (Period): From 02/01/2012 to 31/01/2012 (Timing 10:00 am to 6:00 pm)

He is sincere, honest and hardworking with a professional attitude & possesses very good job knowledge. I wish him all the best and success in future career endeavors.

For M.E.M Industries,

Vishal Mohta

(Director)

PREFACE I

ACKNOWLEDGEMENT II

ABSTRACT III

Chapter

No.

Contents Page No.

1 INTRODUCTION TO COMPANY

2 REVIEW OF LITERATURE

3 PRODUCT PROFILE

4 OBJECTIVES OF STUDY

5 RESEARCH METHODOLOGY

6LIMITATIONS OF THE STUDY

7 DATA ANALYSIS & INTERPRETATION

8 RECOMMENDATIONS & SUGGESTIONS

BIBLIOGRAPHY

ANNEXURE

PREFACE

Someone has rightly said that practical experience is far better and closer to the real world than

mere theoretical exposure. The practical experience helps the student to view the real business

world closely, which in turn widely influences his/her perceptions and understanding of the real

situation.

Analysis and Research work constitutes the backbone of any management education program.

A management student has to do research work quite frequently during his entire life span.

The research work entitled ‘’Future prospect of Cable and Wire Industry in Indian market’’

aims to know customer awareness regarding the cable industry in general and about MEM and

the products offered by it.

The present report is a part of the project that contains the work done by me during the

training period at M.E.M. Industries,Kolkata.

True to the core, a properly and executed industrial training helps a lot in providing linkage

between the student and the industry. It develops the awareness of industrial approach to

problem solving based on a board understanding of the mode of operation of industrial

organization.

This project has offered me an opportunity to put all my efforts and the theoretical knowledge to

practice and enhance my knowledge, and at the same time, given me practical experience in the

field of marketing. It is surely going to help me in my future projects too.

In the preparation of this report, I have made every effort to ensure that all steps involved in

development of this project are adequately covered and the report be completed in it. Any

suggestions for improvement, if rendered, will be gratefully accepted.

I sincerely hope that this project will prove pure knowledge imparting, through provoking and

thus stimulating future research work on these guideline.

ACKNOWLEDGEMENT

“Such Thanks I give As near death to those that whish him Live” - Shakespeare

A formal statement of acknowledgement will hardly meet the ends of justice in the matter of expressing

my deep sense of gratitude and obligation to all those who helped me in the completion of this project

report without whose precious time & expert guidance, the project would not have taken the current

shape.

The past four weeks working on this project under the guidance of my Project Leader and Guide has

greatly influenced my way of thinking towards facing the challenges during day-to-day development of

this project. This will help me a lot in future as I move further ahead in my professional life in the days to

come.

I am especially indebted to:

Mr. Chandra Narayan Mohta

Promoter, M.E.M Industries.

Mr. Vishal Mohta

Company Guide

Managing Director, M.E.M Industries.

Mr. Akhil Shukla

V.P Marketing, M.E.M Industries.

Prof. Tridep Sengupta

Faculty-In-charge

ST. XAVIER’S COLLEGE.

Last but not the least I would also like to express my gratitude to MEM employees and all my friends

who helped me a lot throughout this project.

Yogesh Chandak

Abstract

The market size of the cables and wires industry in India was estimated to be around Rs.150 billion in FY 11, of which cables would be approximately Rs.95-100 billion. It is estimated that approximately 70% of the industry is organized, while the remaining accounts for theunorganised & regional level players. The wire industry in India touched approximately Rs.50-55 billion in FY 11. It was estimated that the 8-year CAGR for the wires & cables industry was 12%.In India, the overall growth for cable industry was less than 5% in FY09-10 against the robust growth witnessed in FY11-12. FY10 was a challenging year for the industry,mainly due to liquidity crunch by end industry user sectors, leading to reduced demand faced due to delay in implementation of both ongoingand new projects.

In India, the overall growth for cable industry was less than 5%in FY 11-12 against the robust growth witnessed in FY 10-11. FY11 was a challenging year for the industry, mainly due to liquidity crunch by end industry user sectors, leading to reduced demand faced due to delay in implementation of both ongoing and new projects.

Chapter -1

Introduction to company

M.E.M Industries have been manufacturing Speciality Cables and Wires for

last 15 years, meeting stringent manufacturing and quality standards to satisfy

demanding users in Steel Plants, Power Plants, Oil Refineries, Paper Plants,

Aluminium Plants, Defence and other hitech industries. They have excellent

inhouse manufacturing facilities with the latest state of the art machineries and the

test facilities are the most comprehensive in India. At all times, highest quality not

only in materials but in services too remains their principle and to achieve this

aim, they take the utmost efforts.

‘M.E.M.’ believe in Innovation, keeping pace with the latest technology and in

course, developing products that would best meet the needs of their customers.

M.E.M.’s thrust for giving latest & better products makes it the leader in the field

of special application cables. The reason behind their success is strong emphasis

on Customer satisfaction in all respect.

M.E.M.’ with its meticulous efforts in maintaining best quality with its well

experienced team having the knowledge of cable designing, are proud and capable

of supplying special cables meeting any Indian / International Standards or

Customised requirements as desired by Project Authorities.

Vision:

"To be a globally recognized corporation that provides best electrical & instrumentation cable solution,

delivered by best-in-class people."

Mission:

To achieve our vision through fairness, business ethics, global reach, technological expertise,

building long term relationships with all our associates, customers, partners, and employees.

Values:

Customer Delight: A commitment to surpassing our customer expectations Leadership by

example. A commitment to set standards in our business and transactions based on mutual trust.

Integrity and Transparency: A commitment to be ethical, sincere and open in our dealings.

Pursuit of Excellence : A commitment to strive relentlessly, to constantly improve ourselves, our

teams, our services and products so as to become the best in class .

Review of Literature

Product Profile:

Cables are the crucial infrastructure backbone of an economy, the critical elements that

wire up the length and breadth of the country as telecom and power networks. Electrical wires

and cables market is growing at a steady pace as the government is investing heavily in

infrastructure development. Increase in capacity of the existing power plants and

commissioning of the new ones have resulted in higher demand for electric wires and cables.

Due to the roll out of 3G and broadband, demand for electric wires and cables is likely to

increaseinthefuture.

The report provides a brief introduction to the cables and wires market. It shows the distribution

of global cable and wire industry. It also provides the classification and a comparison between

Polyethylene (PE) and Poly Vinyl Chloride (PVC) cables on various parameters. The market

overview section gives a snapshot of the Indian electrical equipment industry. It also highlights

the market size, growth and the segmentation. Porter’s five forces analysis helps to understand

the prevailing structure of the electric wires and cable market. The import-export section

highlights the amount of import and export with respect to electric wires and cables over last

four years and the major countries of import and export.

The drivers include the huge investments made by various private companies in power sector as

well as the increasing budget allocation by the government on the power sector. Power sector is

the largest consumer of cables in India. Another important driver is the rollout of 3G and

broadband on a pan-India basis which will boost the market as demand will increase as players

look to enhance broadband penetration levels. Government impetus in refineries, power and

fertilizers will offer a boost to the cable industry as almost all manufacturing companies need

cables.

Robust industrialization and growing urbanization are the other important drivers identified.

Auto sector and railways are the other important sectors consuming wires and cables on a large

scale. Additionally, growth will be fuelled by urbanization as cables and wires will be required

in buildings and offices. Challenges identified include increasing price rise and competition

from Chinese imports. As the price of copper continues to increase, profit margins are squeezed

and they become uncompetitive in the international market. The next section deals with

government initiatives where the credit lending subsidiary scheme is explained.

It also highlights the rules and regulations the wire manufacturers need to adhere.

The competition section offers a bubble chart where the relative positions of the players are

depicted with respect to their revenue, net profit and market capitalization. It also includes

profiles of the major players in the market along with their financials. Key ratios and list of

important contact persons are also listed. Key geographic areas and major business segments are

also included. Key developments that have taken place in the market have been identified. The

last section deals with the strategic recommendations where the critical success factors

important to this industry have been depicted. The Appendix section describes various

associations and exhibitions pertaining to this sector.

Industry Analysis

The power sector in India is yet to show the explosive growth as seen in the Telecom sector. This is

despite the acute shortage of power in the country. The planned addition to generating capacity of 78,700

MW in the Indian government’s 11th five year plan covering the period 2007-2012 is not expected to be

met but it is heartening to note that the capacity addition in the last financial year ending March 2011 has

exceeded 15000 MW, the highest ever increase in capacity in any one year till date. This augurs well for

achievement of the target of 100,000 MW capacity addition set for the 12th five year plan covering the

period 2012 – 2017. This is all the more bolstered by the fact that 60% of the capacity additions in this

plan are expected from private companies, whose entry into the power sector is already giving renewed

impetus to growth. This expected growth of 20 GW per annum is second only to China which plans an

addition of 30 GW annually for the next few years.

“In the 11th five year plan 78,700 MW & 100,000 MW in

12th five year plan power generation capacity

is planned to be added”

Even greater investments have been allocated to the transmission and distribution areas. Double digit

growth is expected in the installation of 400 kV lines and HVDC lines above 500 kV with the highest

growth being charted for transmission lines of 765 KV and above. The distribution targets include

electrification of 100,000 villages which do not presently have any electricity. The outlay in the

distribution segment is expected to increase from USD 30 billion over the past 5 years, to approx USD 90

billion in the next 5 years. This shall greatly enhance demand for MV and LV cables from utilities.

“Distribution segment outlay is expected to increase

from USD 30 billion over the past 5 years to

USD 90 billion in the next 5 years”

The energy cable market in India was estimated at USD 3 billion in 2010 increasing at a compounded

annual growth rate of over 10%. This can be broadly divided into following segments:-

• High voltage HV (> 132 KV): USD 300 million

• Medium voltage MV (11 to 66 KV): USD 900 million

• Low voltage LV: USD 1.8 billion

• Building: USD 800 million

• Distribution: USD 800 million

• Specialty: USD 200 million

The fastest growing segment is that of high voltage cables where the market after being sluggish for many

years has now picked up and is projected to double in the next three years. In addition to the projected

growth in power generation and transmission, the rapid pace of urbanization is also expected to contribute

to enhanced demand for underground high voltage cable installations in place of overhead lines.

The pace of urbanization is staggering. As per a recent McKinsey report, by the year 2030 over 590

million people will live in cities, which is nearly twice the population of the United States. Also the

number of cities with population of 1 million plus will be 68 up from 42 at present. By comparison

Europe has 35 such cities.

In this growth scenario, multinational cable companies are increasingly entering the Indian market. In the

High Voltage field J-Power and Finolex Cables, Furukawa and Universal Cables, Brugg and KEI

Industries, Prysmian and Ravin Cables, Nexans and Polycab, and also General Cables have set up joint

ventures or technical collaborations. These are expected to meet the demand for 132 KV, 220 KV and 400

KV XLPE cables, which are largely being imported at present.

In the medium and low voltage power cable field, the growth is fuelled by the boom in the power,

industrial, realty and construction sectors. Unfortunately, the cable industry continues to be fragmented

with about 125 players in the organized sector and many more in the unorganized sector. There is need

for consolidation to achieve economies of scale and bring in technology and quality improvements which

have sometimes been sacrificed under the current intense competitive pressure and consequent low

margins which are plaguing in the industry. This situation is not conducive to the long term health of our

industry.

A large segment of low voltage cables is composed of building wires whose market is conservatively

estimated at USD 800 million. Here the industry is composed of a few large units with thousands of small

units in the unorganized sector. In this area, there is a pressing need for upgraded wiring systems and

modern manufacturing technology to cater to safety and reliability in this fast expanding market. An

encouraging sign is the emergence of more discerning customers with each passing year.

“Low Voltage cables is primarily composed of

building wires with estimated market share of USD 800 million”

Specialty cables have just started to become a significant market with the growth in sophisticated

applications in many vital sectors of the Indian economy. The government of India’s thrust on non-

conventional power generation such as wind, solar and nuclear power has led to a big push in demand of

special cables required for these applications. The current installed capacity of 4560 MW for nuclear

power is planned to grow by 3400 MW by 2017 and by a further 8000 MW till 2022. In the nuclear

power area, the country is poised for the construction of a large number of power plants in a phased

manner after safety issues occasioned by the Fukushima disaster are addressed. Similarly there is a major

thrust on capacity expansion in wind energy envisaging addition of 22500 MW in the 10 years to 2022.

For wind power, the number of major players such as Suzlon, Enercon and Vestas is being augmented by

entry of other big players such as Siemens and Gamesa. The other areas contributing to the increased

demand for special cables are the growth of mechanized mining and material handling, railways, oil &

gas and shipbuilding industries. These areas require the use of flexible cables often designed for use in

hazardous conditions.

The manufacturing base for specialty cables is concentrated in the hands of a few players such as

Universal, Nicco, Uniflex, Radiant and KEI. However the potential growth in this sector has attracted the

interest of global players like LAPP Cables who have already set up their second manufacturing unit

while Nexans, Prysmian and General Cables are in advanced stages of entry. Such plans are strengthened

by the possibility of India emerging as a regional hub for the manufacture of such cables, especially in

view of the free trade agreements as also the comprehensive economic partnership agreements that India

has with countries like Sri Lanka, SAARC & ASEAN countries, Singapore, Korea and Japan.

In conclusion, the outlook is rosy; the implementation of double digit growth in the cable industry is a

challenging task. Particularly for multinational companies entering India, the complex regulatory

framework, the bureaucratic red tape and prevalence of corruption are a daunting barrier. But reforms,

though slow, are progressing and participation in the Indian market is a must for all truly global players,

as India is on its way to becoming the third largest economy in the world over the next 15 years.

SWOT Analysis:

Strength

Cables are the backbone of the communication sector. Favorable demographics and increased

discretionary spending drive the growth of this sector. India is the fastest growing telecom

market in the world adding huge subscribers’ base every month. In addition, the telecom

companies are aggressively making inroads into rural markets. In addition, with the government

initiatives for the Universal Service Obligations (USO) fund on an annual basis is likely to keep

the demand for telecom infrastructure, including cables to remain strong. The Indian cable

industry is having strong clearly there is great potential for further mobile expansion in India if

mobile density approached the level of China or other developing Asian countries. This will be a

positive development for fibre optic cable demand as additional network capacity will be needed

to handle the traffic generated by expansion of the mobile phone subscriber base.

Weakness

The raw material prices viz; the copper and Aluminium remains volatile and the industry is fully

dependent on them Copper soared to an all-time high of $10,190 in February this year. However,

it has slipped by around 6 percent since then, it is still up 200 percent from 2008 lows and costs

about four times as much as aluminum, its nearest substitute.

Opportunity

In the last couple of years the fibre market has shown huge growth, worldwide fibre makers as a

group were able to meet the increased level of demand, but only just. From 2007 onwards, there

has been very little excess capacity - supply and demand have been balanced on a worldwide

level. New capacity in India and China has helped to meet the surge in Asian fibre demand. In

2009, China consumed 47% of the world’s fibre; whereas it only manufactured 35%. China had

been the main driver in the market globally at more than 40% of all world demand. Some in the

market had expected the demand for fibre optic cable to slow in China at the end of 2010, but

latest data for Q4 2010 shows that demand has continued to remain robust. In domestic markets,

there is more awareness now for the safety compliance in high rise buildings. The new airport

and underground railway stations require stringent safety features. All this encompasses great

growth outlook and opportunity for the sector.

Threats

Prices of many key raw materials used in cable-making rose sharply, becoming much more

volatile, with substantial fluctuations in market prices on a short timescale. Since then the

volatility has continued and after a slump due to the economic crisis that hit at the end of 2008,

prices have now risen again. The price of copper in particular is now a major talking point in the

cable industry though prices has been supported by the weakness in the US Dollar, though faster

than expected recovery in refined copper consumption, particularly in Asia was the major factor

for the prices rising to pre-recession era and resulted in demand exceeding supply in 2010. For

the second time in the last decade (the other being 2004), all the major regions of the world

posted an increase in wire and cable consumption. There was a modest deficit in 2010 but if the

consumption continues at similar level to last year than a significant deficit in 2011 can be

witnessed as supply further struggles to keep up with demand. This deficit coupled with a

continuing tight scrap market and the potential influence of the financial community means that

prices look set to rise further.

Outlook

The domestic cable and wire industry is highly matured though it is characterized by the few

players in the organized sector and has became a price sensitive industry that has in turn

impacted the quality standards and has somehow became an unremunerative business, with the

raw material price volatility and high fund requirement in the rising interest environment, all the

players have been impacted adversely. However the industry has started showing good growth in

cable export business and that may help to some extent in mitigating the margin pressure.

The current scenario for the Indian cable industry is not looking very good, as there are very few

manufacturers in the organized sector (around 25 only) and their installed capacity is much

higher than the present demand and despite a good volume growth there exist a cut-throat

competition among the cable manufacturers, the situation is not better on the global front too as

the volatility in the raw materials viz; copper and aluminum prices has stalled the growth of the

sector. Copper prices have been very volatile and have become a major hurdle for the sectors

growth though cheaper aluminum has made inroads into some industries, especially the auto

industry, where there is big demand for lighter, more energy-efficient cars.

Though there has been some uncertainty regarding the global economic recovery and India is not

a different story, for the last few months due to consistent interest rate hike by the Reserve Bank

of India, the signs of degeneration have started on the industrial growth and remain a concern for

the cable and wire sector too. Once the situation stabilizes the demand for the incremental cables

supply, prevalent in the industry (in form of large, ongoing infrastructure, power and industrial

projects) is expected to flow and then the industry may again. There has been consciousness for

the green energy for last some time and the Wind power generation, which uses good amount of

wire is a small but growing market. Also, the Introduction of energy efficiency regulations will

typically require more or larger cable to be used.

Cable industry suffers due to copper price volatility:

The Indian cable industry worth over Rs 27,000 crore is highly fragmented with large number of

cable producers, many of them being small-scale cable producers; some are even family-run

operations which use the most basic production equipments. There has been very limited

consolidation amongst the major players in the industry. The tendency of cable companies to

grow organically, rather than by acquisition of competitors, means that no dominant groups have

emerged in the industry.Historically, the demand in the electrical cable industry has been

characterized by its cyclical pattern. The sector witnessed sustained market depression during the

period 1998-2003 and since then the industry is on the upswing. Though there was some

consolidation during the recession phase of 2008-09 but afterwards with infrastructure receiving

priority attention from the Government of India, construction, power and telecom sectors are fast

developing, giving a boost to the wire and cable industries in the near future.

Composition of the Indian cable industry

Not only in India but across the globe Industrial and domestic users are the mainstay of the cable

market. The industrial users mainly comprise of power, communication, cement, steel, railways

and petro-chemicals sectors. Most of their demand is addressed by the organized sector.

However, if we talk about the household demand then it is still being met largely by un-

organized sector. Though there has been a shift in the preferences and the domestic consumers’

too are becoming quality conscious and there is a steady shift towards high end cables thereby

benefiting the organized sector.

The cable industry can be broadly segmented into extra high voltage power cables greater than

66KV, medium voltage power cables up to 33KV and Low voltage power cables up to 1 KV,

instrumentation and control cables, light duty cables, fibre optic cables, copper telephone cables,

elastomer rubber cables and specialty cables, each of these is an industry itself.

Application of cables

The wire and cable industry manufactures a wide range of products that support a multitude of

applications. Key functional components of wire and cable products include heat stabilizers,

which may contain lead, flame-retardants, and polymer systems used in insulation and jacketing.

These materials and other ingredients impart electrical insulation, physical stability, and fire

performance properties, but have been identified as materials of potential environmental concern

or as materials for which industry stakeholders have expressed a desire to identify and evaluate

alternatives.

Wire and cable sector basically consists of two areas: power and telecommunication. Powers

cable essentially uses PVC while telecommunication sector uses PE. Power cable consists of 3

types of products depending upon the intensity of power. Low-tension cables have a capacity up

to 1.1 KV and predominantly use PVC insulation and jacketing. The medium tension power

cables are between 1.1 KV and 11 KV generally use PE as well as PVC. The high-tension sector

is beyond 11 KV. This sector uses exclusively PE. The low-tension cables are used for tertiary

distribution of power mainly from substation to buildings. It also includes housing wires. This

sector contains many other products for myriad applications. The medium tension cable

generally use silane croslinkable PE compounds while the high-tension cables use continuous

vulcanization cables made from PE (LDPE). The telecommunication cables are essentially made

from PE because of excellent insulation characteristics.

Amongst the industrial users, wires and cables mainly find application in three sectors: power,

industrial and telecommunication. Industrial cables include control and instrumentation, LT

cables, HT cables and specialty cables whereas telecom cables are classified as high capacity

cables (Optical Fibre Cables -OFCS) and Low capacity cables (Jelly Filled Telecom Cables -

JFTCS).

Control cables are used for control circuits in power plants and other similar industrial -

Electrical installations and signaling network of Railways. Instrumentation cable offers total

interference free data transfer and is ideal for use as a signal and control cable in measuring,

process- control and security systems. Instrumentation process in any industry is a very

important factor for controlling various parameters during processing. These cables are used in

normal or hazardous areas. These cables come with or without flame retardant properties and are

suitable in process control, A/D converters and other modern microprocessor based

instrumentation circuits. Microprocessor based control devices demand very low noise level and

attenuation of signals in the cable. These cables are designed to offer excellent resistance to noise

and induction phenomena encountered in instrumentation circuits

Demand drivers

Cables are the necessity of every basic infrastructure. Be it housing, telecom or information

technology, cables form the backbone of all the core industries. The industry has a derived

demand and caters to the high growth sector of the economy.

Demand for cables comes from the following sectors:- Industrial capex (on construction of new

plants and factories);- Power capacity addition during 11th and 12th plan;- Housing and

construction of IT / ITES complexes, malls, multiplexes, etc; and- Others like Mining,

Shipbuilding, Defense, R&D and large processed based industries.

Industrial investment

Industrial investment coming in the form of Industrial plants and buildings and other electrical

and control equipments and machinery would require power and control cables- be it high

tension or medium- tension or low tension. This would drive demand for power cables in

industrial sector, going forward. Industrial capex has been picking up on the back of increasing

industrial production with revival in economy.

Demand due to power capacity addition in five year plan

Power is a vital input for economic and social development of our society. Besides its

importance in the growth of the country’s economy, it plays a major role in the life of a common

man and has a direct impact on the quality of life. Power cable industry is mainly dependent on

the status of the power sector. It has been estimated that in the long term the projections of power

requirement are expected to grow, with the Installed Capacity requirement by 2031-32

Tentative capacity addition proposed during 12th Plan (2012-2017)

Twelfth Plan Estimates (in MW)

Hydro 30,000

Thermal 44,500

Nuclear 12,000

Total 86,500

Housing and construction of IT/ITES complexes, malls, multiplexes, etc.

This sector is expected to continue its growth on the back of rising demand for residential

property from increasing number of nuclear families and easy availability of housing loans. IT

and ITES sectors are growing, which is resulting in development of IT parks and development

centres. This is giving further boost to capital formation in service sector infrastructure.

In real estate, low tension cables called housing wires and Lighting cables are used extensively.

Consumption of housing sector growing, we expect demand for housing wire to grow.

Thereafter, the demand for cabling and LAN cables would grow in commercial building and TV

cables in case of housing complexes and TV - coaxial cables in intelligent building network

management. These all factors would drive demand for cables.

Constituents of cable

Copper is the major and primary raw material used for making cable, almost 60% of the global

copper production is used for making wire and cables because of its superior electrical

conductivity. It is a ductile metal with very high thermal and electrical conductivity. There has

been consistent rise in copper prices in last couple of years as the demand increased surged post

recession, mainly in the Asian region but the supply grew with a comparatively slower pace and

created a demand-supply mismatch that raised the prices to news high. Though fear of a possible

double dip recession in Western nations eased the prices to some extent but on the same time

anvil of physically backed Exchange Traded Products have moved the prices up.

Electrical and Electronic Products and Telecom are Major Consumers of Copper in India

In 2013 a number of new mining projects are due to come on stream and supply should grow at a

faster rate than demand .This should lead to an easing of prices, which are forecast to fall back to

an average of under $7,000/tonne.

But as the copper prices are continuously increasing the most obvious material substitution for the cable industry is to use aluminium as a conductor rather than copper. In looking at the relative cost of copper and aluminium conductors a combination of the price ratio, the specific gravity ratio and the conductivity ratio needs to be taken into account to get a true idea of the cost saving in using aluminium. Copper is much heavier than aluminium (with a specific gravity of 8.9 g/cm3 compared to 2.7 g/cm3 for aluminium) and so a copper conductor weighs 3.3 times the weight of an equivalent sized aluminium conductor. However, aluminium only has 61% of the conductivity of copper and so to carry the same current aluminum conductor needs to be 61% larger in area. Thus by weight you need to use around 2 times as much copper as aluminium (3.3 x 0.61) to get an equivalent conductor capable of carrying the same current.

OBJECTIVES OF THE STUDY

Every study is conducted with key objectives and aims kept in the fore. Without aims and objectives the

study is like a ship without radar. So aims and objectives of this study are.

1) To coordinate with internal departments to respond quickly to customer needs,

requests and problems.

2) To know how satisfied are customers and retailers with the products they purchase and the

services provided by the company.

3) To find out what the customer and the retailer wants from MEM cables.

4) To know the market shares of MEM Cables.

5) To know the perception of customer regarding the quality of MEM cables.

6) To know the most influential factors that influence the customer behaviour towards MEM

cables.

Areas of work:

Attend business tradeshows. Participate in marketing plans. Create promotional materials. Create sales presentations and present to prospects. Assist with retail events. Create displays. Plan special events. Work with clients.

CHAPTER 4

RESEARCH

METHODOLOGY

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. The research

methodology included various methods and techniques for conducting a research. “Marketing Research

is a systematic design, collection, analysis, and reporting of data and finding relevant solution to a

specific marketing situation or problem.” Sciences define research as “ the manipulation of things,

concepts or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether

that knowledge aids in construction of theory or in practice of an art.”

Research is thus, an original contribution to the existing stock of knowledge marketing for its

advancement, the purpose of research is to discover answers to the questions through the application

of scientific procedure.

My research project has a specified framework for collecting the data in an effective manner. Such

framework is called “Research Design”. The research process which was followed by me consisted

following steps.

4.1) Defining the problem & Research Objectives

It is said, “A problem well defined is half solved”. The step is to define the project under study and

deciding the research objective.

4.2) Developing the Research Plan:

The second stage of research calls for developing the efficient plan for gathering the needed

information. Designing a research plan calls for decision on the data sources, research approach,

research instruments, sampling plan and contacts methods. The research is descriptive in nature and is

aimed at analyzing the future prospect of Cable and Wire Industry in India.

The development of Research plan has the following Steps:

a.) Data Sources

Two types of data were taken into consideration i.e. Primary data and Secondary data. My major

emphasis was on gathering the primary data. The secondary data has been used to make things

more clear.

i. Primary Data: Direct collection of data from the source of information, including personal

interviewing, survey etc.

ii. Secondary Data: Indirect collection of data from sources containing past or recent

information like, Annual Publications, Books, Newspaper and Magazines etc.

4.3.) Research Approach

Surveys are best suited for Descriptive Research. Surveys are undertaken to learn about people’s

knowledge, beliefs, preferences, satisfactions and so on and to measure these magnitudes in the

general public. Therefore I have done this Survey for the Descriptive Research Process.

4.4.) Research instrument

A close friend questionnaire was constructed for my survey. A Questionnaire consisting of a set of

questions was presented to respondents for their answers.

a.) Sampling Plan

The sampling plan calls for three decisions.

i. Sampling unit: Who is to be surveyed?

The target population must be defined that has to be sampled. It is necessary so as to develop a

sampling frame so that everyone in the target population has an equal chance of being sampled. The

sampling unit of this project was Kolkata.

ii. Sample Size: How many people have to be surveyed?

Generally large sample gives more reliable results than small samples. The sample consisted of 100

respondents. The sample was drawn from 15 retailers and 20 end user’s customers’ people having

different educational qualifications, occupations and age group. The selection of the respondents

was done on the basis of simple random sampling. The sample was drawn from people having

different educational qualifications, occupation and age groups.

iii. Contact Methods

Once the sampling plan has been determined, the question is how the subject should be contracted

i.e. by telephone, mail or personal interview. Here in this survey, I have contacted the respondents

through personal interviews.

4.5.) Collecting the information

The collection of data is a tedious task. For conducting any sort of research data was needed. So

for my research, there was plenty of primary data and for increasing the validity of information

collected, some books, journals, pamphlets, information about the company were studied and

taken into considerations. After this, I have collected the information from the respondents with

the help of questionnaire.

a.) Collection of Primary Data: Primary Data is the data collected from the original

source. In my survey and study, there was optimum availability of primary data because

every aspect was witnesses carefully at each point. Questionnaire and personal

interviews were the main instruments, which were used for collecting primary data.

b.) Collection of Secondary Data: Secondary Data is the one which has already been

collected by someone else and some other person is using that information. The source

of secondary data was, some related books and websites related to the company. The

competent staff of the company helped me a lot in providing information about the

company.

4.6) Analyze the Information

The next step is to extract the pertinent findings from the collected data. I have tabulated the

collected data and developed frequency distributions. Thus the whole data was grouped aspect

wise and was presented in tabular form. Thus, frequencies and percentages were prepared to

render impact of the study.

4.7.) Presentation of findings:

This is the last and important step in the research process. The findings are presented in the

form of graphs, pie charts, conclusions, suggestions and recommendations after data analysis.

LIMITATIONS OF THE STUDY

1) The possibility of respondent’s responses being biased cannot be ruled out.

2) Limited access to secondary data pertaining to MEM’s performance in other regions or any

other information was another problem in finding a correct response.

3) Since a smaller sample was chosen so it may not be true representative of population under

study.

4) Most of the times people don’t give appropriate information.

5) Mostly retailers don’t want to give accurate information and act rudely.

6) The survey was to be conducted in a limited span of time (4 weeks) which also posed a limiting

factor.

7) The retailers are so busy in their business so that they did not show actual picture of the

situation.

CHAPTER- 5

DATA ANALYSIS

AND

INTERPRETATION

Summary Findings

Electrical wires and cables market is growing at a steady pace as the government is investing heavily in infrastructure development. Increase in capacity of the existing power plants and commissioning of the new ones have resulted in higher demand for electric wires and cables. Due to the roll out of 3G and broadband, demand for electric wires and cables is likely to increase in the future.

The report provides a brief introduction to the cables and wires market. It shows the distribution of Indian cable and wire industry. It also provides the classification and a comparison between Polyethylene (PE) and Poly Vinyl Chloride (PVC) cables on various parameters. The market overview section gives a snapshot of the Indian electrical equipment industry. It also highlights the market size, growth and the segmentation.The import-export section highlights the amount of import and export with respect to electric wires and cables over last four years and the major countries of import and export.

The drivers include the huge investments made by various private companies in power sector as well as the increasing budget allocation by the government on the power sector. Power sector is the largest consumer of cables in India. Another important driver is the rollout of 3G and broadband on a pan-India basis which will boost the market as demand will increase as players look to enhance broadband penetration levels. Government impetus in refineries, power and fertilizers will offer a boost to the cable industry as almost all manufacturing companies need cables. Robust industrialization and growing urbanization are the other important drivers identified. Auto sector and railways are the other important sectors consuming wires and cables on a large scale. Additionally, growth will be fuelled by urbanization as cables and wires will be required in buildings and offices. Challenges identified include increasing price rise and competition from Chinese imports. As the price of copper continues to increase, profit margins are squeezed and they become uncompetitive in the international market. The next section deals with government initiatives where the credit lending subsidiary scheme is explained. It also highlights the rules and regulations the wire manufacturers need to adhere.

The competition section offers a bubble chart where the relative positions of the players are depicted with respect to their revenue, net profit and market capitalization. It also includes profiles of the major players in the market along with their financials. Key ratios and list of important contact persons are also listed. Key geographic areas and major business segments are also included. Key developments that have taken place in the market have been identified. The last section deals with the strategic recommendations where the critical success factors important to this industry have been depicted.

Questionnaire

1. How many brand of Cables you sell?

Response No of respondent

One 5

Two 12

Three 24

Four 22

More Than Four 12

1 2 3 4 >40

5

10

15

20

25

No of respondent

No of respondent

Inference The above chart shows that 22 retailer sell three type of brand of Cables, 20 retailers sell four type brand,7 retailers sell only two type, 4 retailers sell more than four brands of Cables and only one retailer sell one brand of Cable.

2. Which brand of Cables frequently sells at your counter?


Havells 22

KEI 20

Polycab 27

Any Other 6

Inference According to this chart 36% retailer sell PolyCab, 29% sell Hevells, 27% sell Kei brand of cable..

29%

27%

36%

8%

No of respondent

HavellsKEIPolycabAny Other

3. What do you feel about service of the MEM industries?


Very Good 7

Good 20

Average 13

Poor 11

Very Bad 3

Very Good 13%

Good37%

Average24%

Poor20%

Very Bad6%

Very Good

Good

Average

Poor

Very Bad

Inference 13% retailer of my survey feel service of MEM is very good, 37% feel service is good, 24% feel average about the service of the company, 20% feel service is bad and 6% retailers feel service of company is very bad. So majority of retailers are happy with the service of the company.

4. Do you agree with the price of MEM Cables is competitive?


Strongly Agree 10

Agree 28

Disagree 14

Strongly Disagree 2

Can’t Say 00

Strongly Agree Agree Disagree Strongly Disagree Can’t Say0

5

10

15

20

25

30

10

28

14

2

0

Strongly AgreeAgreeDisagreeStrongly DisagreeCan’t Say

Inference The majority of retailers of my survey think the price of MEM Cables is competitive. But 14 retailers are not agree that the price of MEM Cables is competitive.

5. How effective the promotional activities of MEM Industries?


Very Good 15

Good 19

Average 11

Poor 7

Very Bad 2

Very Good 28%

Good35%

Average20%

Poor13%

Very Bad4%

Very Good

Good

Average

Poor

Very Bad

Inference 83% retailers think the promotional activities of MEM is good and 13% think promotional activities of company is bad.

6. In your opinion the new adjustment policy of MEM Cables in the form of 7% less in bill is…………..


Useful 0

Useful to some extent 5

Wasteful Efforts 48

Can’t Say 1

0

5

10

15

20

25

30

35

40

45

50

Useful; 0

Useful to some extent; 5

Wastefull Ef-fort; 48

Can't Say; 1

UsefulUseful to some extentWastefull EffortCan't Say

Inference the new policy related to is a wasteful effort of the company according to the 48 retailers out of 54. Because retailer want guarantee product for sell.

7. What type of products do you want to sell?


Quality Products 15

Guarantee Products 35

Any Other 4

Quality Products28%

Guarantee Products65%

Any Other7%

Quality Products

Guarantee Products

Any Other

Inference From the above chart we conclude that most of the retailer wants to sell guarantee product. Only 28% retailer prefer to sell Quality product because of they avoid the risk as far as possible.

8. Availability of MEM Cables in the market………….


Always Available 48

Occasionally Available 6

Always Unavailable 0

Always Available

89%

Ocassionally Available11%

Always AvailableOcassionally AvailableAlways unavailable

Inference:- 89% retailer assume that MEM Cables are easily available when they need.

CHAPTER 6

RECOMMENDATION

S

&

SUGGESTIONS

Recommendations and Suggestions

1) More local/ regional advertisements should be there to make people aware about MEM and its

products.

2) There should be more advertisement on the world wide web also.

3) Campaigning should be done at all level.

4) Business Development Officers should contact Architects and Customers on regular basis.

5) More flexible discount schemes should be provided.

6) Product catalogues and price lists should be provided to the customers on regular basis.

7) Increase the percentage rate of ADJUSTMENT POLICY. Or start guarantee.

8) Improve the behavior of sales person of the company as well as distributor.

9) Company should further reduce its price without compromising on quality.

10) Fulfill all the commitments which are made by company or distributor.

11) The adjustment policy’s rate is not enough because replacement rate is 15% to 20%.

12) If company backs out any scheme, then it should give some time to the retailer.

13) Provide updated information and knowledge to the retailers about the product.

14) Provide equal Price to all the retailers.

15) Company should compromise with dealer according to the circumstances.

16) Company should improve its grievance handling system

CONCLUSION

In conclusion, the outlook is rosy; the implementation of double digit growth in the cable industry is a

challenging task. Particularly for multinational companies entering India, the complex regulatory

framework, the bureaucratic red tape and prevalence of corruption are a daunting barrier. But reforms,

though slow, are progressing and participation in the Indian market is a must for all truly global players,

as India is on its way to becoming the third largest economy in the world over the next 15 years.

In the long run the survival in this industry has become very difficult due to intense competition but companies who are pro active and deals in special cables and adopting to the changing=ng environment will definitely survive .

Documents

Cable Industry