A Complete Electrical Products Company
Established in 1958 by the brothers Pralhad P Chhabria and Kishan P Chhabria Finolex Cables Ltd. is India’s largest and leading manufacturer of electrical and telecommunication cables. The brothers, right from beginning, never compromised on quality and safety. Such ethical standard enshrined in the Company’s DNA has today made it the most reliable brand. Over five-decade long journey, the Company has cemented its reputation as an innovative leader and quality manufacturer by continuously upgrading technology, modernizing manufacturing facilities and maintaining the highest standards in quality and service. Backward integration for the manufacture of crucial cable components and landmark collaborations with leading global players have further strengthened its capabilities and reinforced the Company’s competitive edge.
Early in its journey, the Company promoters wrote the first chapter of India’s Cable Industry by setting up a small-scale industrial unit for the manufacture of PVC insulated cables for the automobile industry. Later they introduced the concept of using multi-strand conductors for the manufacture of electrical wires as the existing technology was becoming unpopular due to the inherent disadvantages in product handling. This innovation improved the flexibility of the wires and made the wires easier to handle during installation. The superior approach was also adopted by others and soon became the industry norm.
In the late 80s, the unfolding possibilities in the telecommunications sector led the management to put in place strong growth drivers and Finolex Cables became the first private sector company in India to manufacture Jelly Filled Telephone Cables (JFTC) which was used in landline telephones. In 1983, the Company tapped the capital market and to fulfill the huge demand opened another plant in Urse. The Company successfully supplied to National Telecom Provider DoT (now BSNL). This solution remained relevant for over a decade till the JFTC era ended with the advent of Fibre Optic technology in the country. It was late 1990s when the advent of mobile phones halted the dream run of the Company.
But it was also the time when a young and dynamic Mr Deepak Chhabria, after completing his studies from USA, arrived on the scene. Till then, Finolex, was a one-product, one-client company. He gradually turned the crisis into an advantageous situation by adding multiple products and a wider customer base. Soon the Company had a diverse product basket, manufacturing a variety of cables, and diversification and expansion programme became a regular feature. In less than a decade the wire and cable Company became a complete electrical products company.
Today besides a wide variety of Wires & Cables, the Company is also manufacturing lighting products, electrical accessories, switchgear, fans and water heaters. The company has set up four modern state-of-the-art plants, equipped with the testing facilities, located in Pimpri (Pune), Urse (Pune), Goa & Roorkee (Uttarakhand).
The history of Finolex Cables is marked by many ‘industry first’ milestones, putting it at the forefront of meeting evolving market requirements. Company’s diversified wires and cables portfolio has enabled it to dominate the Indian industry and cement its reputation as the preferred brand for any cable requirement.
Face to Face
“We plan to have at least one Finolex House in every city”
Mr Deepak K. Chhabria, the Executive Chairman of Finolex Cables Limited, finished his school from Sevenoaks, Kent, in England and then completed his Bachelor of Science in Engineering Management from University of Evansville Indiana, USA. He joined Finolex Cables Ltd. as Deputy Production Manager in 1986 and was actively involved in setting up 9 different manufacturing plants across four locations. He has also served as the Chairman of CII-Pune Chapter.
He was instrumental in making Finolex Cables from a one-product, one-client Company to become a multiple products and a wider customer based. Today the Company has a diverse product basket, manufactures a variety of electrical and communication cable products, copper rods, electrical switches, lighting products, electrical accessories, switchgear, fans and water heaters. Here Mr Deepak K. Chhabria shares his views in a free-wheeling chat with Indian Economy & Market.
After the Company came under your direct control around two decades back it has seen tremendous growth despite several disruptive technological advancements. Please discuss the business strategies, you applied, which made the phenomenal growth possible in such a competitive sector?
I did nothing new except following the footsteps of our Founders. Their enduring influence is as vibrant today as when they were at the helm of affairs. Their passion for innovation and persevering spirit is a guiding principle for all at Finolex Cables and a lasting legacy to our industry.
When I took control in the 90s, the decade was marked by the internet, digital and cable revolution. With AT&T, world leaders in communication technology, selecting us as a joint venture partner, we were empowered to meet emerging requirements of the information age. The strategic collaboration enabled us to foray early into the manufacture of Optic Fibre Cables, the enabler of high-speed communications. The comprehensive cable range was supplied to DoT and other public and private sector operators. Again post 2000, when high-rise structures witnessed steady growth due to urban sprawl, we pioneered the concept of Flame Retardant (FR), Fire Resistant Low Smoke (FRLS), and Halogen Free Flame Retardant (HFFR) type of wires to ensure the safety of such constructions. Our success is basically the result of an early recognition of the opportunities.
It seems the focus is shifting from B2B to B2C. Is it a market-driven decision?
Our extensive offerings in wires and cables segment suit diverse domestic and industrial requirements. Our foray into consumer electrical segment is in line with our aim of becoming an electrical products company. Within our cables segment, our product portfolio is all encompassing, serving diverse industrial and domestic requirements. Going beyond cables, a whole gamut of electrical products, including switches, MCBs, lighting products, fans and water heaters is now available from the Finolex stable. We are pushing the reach of our electrical products through our vast distribution network while also building a separate network for every product line. We have recently extended our brand offerings to MCCB’s and electrical accessories. Going ahead, we will continue to expand offerings in electrical products and introduce new products across multiple segments to augment the scale and strength of our business.
Is there any specific plan in this regard to expand marketing network?
At every touch point, our aim is to deliver a differentiated experience and strengthen brand recognition. The key highlight was the launch of Finolex House at select cities. A convergence strategy of diverse marketing vehicles is being leveraged to enhance our brand visibility. We have increased our visual presence with higher spends on advertising and marketing. With increasing number of consumers moving online, significant shares of our media impressions are through the digital medium. During the year, various campaigns for celebratory occasions, Finolex House launch, electrical safety and product awareness were driven on the social media through digital posts and video promotions.
We continue to sponsor the Kings XI Punjab team at the Indian Premier League (IPL) and the ‘Jaipur Pink Panthers’ team in the Pro Kabaddi League tournament. Our partnership with both has enabled us to garner huge brand visibility, increase our brand reach and engage better with audiences. We also leveraged this association on social media which was evident from the popularity of the digital content with video views exceeding 45 lakhs and Facebook fans exceeding 5 lakhs.
Are you exploring E-commerce platform?
E-commerce is transforming the way consumers shop across the world, so we continue to invest in being a connected company. Our E-commerce site offers consumers the option to shop online seamlessly. Our digital marketing strategy is devised to drive traffic to our E-commerce platform and we find a growing number of visitors on our site. By further analytics of E-commerce Site usage by visitors, we are constantly upgrading and updating our site to enhance deeper interactions and usability.
Any new product or area you are planning to enter?
Our state-of-the-art manufacturing facilities have been one of our greatest strengths. We continue to invest in maintaining this strategic edge. We have committed a capex of `200 crore over the next months for enhancing our manufacturing capabilities at Urse, Pune. This capex is directed towards enhancing production capabilities to meet the requirements of the Solar Power Industry and the Automotive Industry, bringing in-house certain value additions which were outsourced earlier and further expansion of the Optic Fiber line.
We will soon be introducing new solar cables and automotive cables that meet emerging demands of the respective sectors. Also, the construction sector, which accounts for 60% of our electrical wires and cables revenue, is poised for strong growth. A new Plant to manufacture PVC conduits is under construction at our Goa facility and expected to go on stream in the next two months. This will allow us to start a business relationship with the Project Developer right at the initial stage after which Wires, MCBs, Switches, Lighting will be required to complete the wiring in a home.
There is talk of a New India Story after Modi 2.0 win; how Finolex hopes to make a mark in that story?
I strongly feel that progressive policies and initiatives like, Bharat Net, Digital India and Smart Cities projects, in particular, provide a thrust to digitization and offer attractive medium and long-term prospects for the demand of optic fiber. The Government’s Power for All mission, higher infrastructure spends and growth in affordable housing projects are likely to drive growth in the business. Infrastructure spending is estimated to rise close to `25 trillion over the coming years. Projects such as Saubhagya Scheme, Power for All and Integrated Power Development Scheme will spur investments. Deendayal Upadhyaya Gram Jyoti Yojana, and Housing for All also augur well for the sustained demand of our electrical wires and cables.
We’re predominantly operating in business segments that are core to the government’s key focus areas which include infrastructure development initiatives, thrust on digitalization, electrification of rural villages and households and improved consumer spending. I’m sure the allocation of highest ever capital expenditure of `1.6 lakh crore for railways is expected to augur well for the Company. Furthermore, formalization of the economy and reduction in price gap with GST implementation will facilitate a shift in business from the unorganized to organized segment, thereby benefitting the Company.
So you are hopeful for the future?
Why not? Led by key reforms such as RERA, GST and Pradhan Mantri Awas Yojana (PMAY), residential and commercial construction, India is projected to grow by 6-7% CAGR during FY 2019-2023. A lot is happening at renewable power generation front which will also drive demand for solar cables. Then the copper based electrical and communication cables are likely to gain considerable traction, driven by the growing impetus on high-efficiency products such as motors and transformers. This, in turn, is likely to boost the demand for copper rods that the Company produces. In addition, we will also benefit from selling of copper rods to third parties under the GST regime.
As we manufacture communication cables that are in line with local and international quality standards, our products generate significant demand in the domestic and export markets. Besides, our collaboration with J-Power (Japan), Corning (USA), AT&T (USA), NSW (Germany), Essex USA, etc. enables us to leverage the technological capabilities and meet market challenges.
How you maintain the large channel partners and dealers for so long period?
We’ve always been very cordial to our distributors. It has been a tradition to meet all of them every year at some point of time. During those gatherings at informal meetings we get a lot of feedback regarding our products and services. Over the years those comments, views and feedbacks have been very helpful in shaping the future course of action. Now, led by our purpose of growing new vertical of electrical consumer products and further diversify our business, our strategy is directed towards setting up a robust two-tier distribution model. This will ensure that our home products are available on the store shelves of more retailers across the country. Aligned with this strategy, we have commenced on an ambitious plan of enhancing our retail outreach to 1,50,000 from the current base of 30,000 by the end of this financial year.
What response you have received from your exclusive stores, Finolex House?
The launch of our exclusive retail store – Finolex House – is our commitment to the consumers to offer them the whole range of Finolex quality products under one roof. Finolex House serves as a one-stop shop for consumers who are constructing or improving homes, thus enabling them to get a first-hand feel of our products. The store offers end-to-end electrical solutions for a safe home, from a range of high-quality cables to electrical fittings, including our home appliances comprising fans, water heaters, switches, accessories, switchgear products and LED lighting products.
Any plan to increase its numbers?
We launched eight such exclusive retail stores during the year. Our goal is to launch 50 such stores across Tier 1 and Tier 2 cities. Coupled with expansion of our distribution network, the increased spends towards advertising and marketing will also deepen our brand engagement. Our greatest thrust is in the realm of digital through a wide spectrum of compelling marketing content on popular platforms. We are confident that our focused efforts will make us a well-recognized player in the fast-moving electrical goods segment.
We have consciously positioned ‘Finolex House’ in the main electrical market or at the road leading to the entrance of the electrical market. This allows our consumers to visit the Finolex House at the point of making the final decision for purchase. They can see, feel, and touch the product in the Finolex House and either purchase it right there or from any retail point in the market. The feedback, from the Channel Partners operating the Finolex House, has been very positive in terms of customer satisfaction and sales. We plan to have at least one Finolex House in every city in the near term.
Collaboration with Sumitimo, GE, Corning & AT&T
The investments in power sector and the process of urbanization translate into a large demand for High Voltage (HV)/ Extra High Voltage (EHV) Power cables for efficiency in transmission & safety reasons as, there is a growing need to convert the overhead transmission power lines to underground.
J-Power Systems Corporation (JPS) of Japan (a wholly-owned subsidiary of Sumitomo Electric Industries) and Finolex Cables Ltd. established a Joint venture in 2008 to offer complete turnkey solutions in EHV cable systems in India and abroad. The JV – Finolex J-Power Systems Ltd. (FJPS) is backed by the technical expertise and R&D of JPS in the area of Design, Manufacturing, Testing, Project Design & Execution and Overseas Sales.
The manufacturing facility is well equipped to produce EHV XLPE (Extra High Voltage Cross Linked Poly Ethylene) Insulated Power Cables. Since such power cables are installed in a trunk line of EHV power transmission grids in the urban areas, extreme quality and reliability is required. FJPS is technically ahead of its competitors, as its parent company is the inventor of EHV cable technology and backed by their five decades of R&D. FJPS is based near Pune for manufacture and backed by a strong nationwide sales and branch network of Finolex Cables Ltd.
Finolex Cables tied up with GE, U.S.A. for compounding and NSW, Germany, the world leader in PVC winding wires to work underwater in the submersible pump industry. NSW used a special grade of PVC and that particular application Finolex learned from them. And about Corning, it was different. Initially, Finolex Cables bought performs from a Japanese company Shin-Etsu. And, later on, it bought from any source it wanted. Finolex however entered in a tie-up with Corning later as it needed a long-time technology partner because the fiber optics is very dynamic field. With Corning, it’s a marketing tie-up for selling fiber in the Country and Corning helped the Company with technology in its existing business to improvise it.
Earlier Finolex Cables had a wonderful experience with AT&T which was again a very remarkable partnership. It was for OFC related technologies. The collaboration with this USA giant then was a major thing for the Company, which resulted in AT&T Finolex Pvt. Ltd., its OFC plant at Urse. After break-up of AT&T in various divisions, the cable business was named Lucent and thus the JV became Lucent-Finolex. Lucent was later acquired by a Japanese company and Finolex retained the plant in lieu of its shares, now a division of Finolex Cables.
What drives you?
The desire to do something new, like developing and launching new products with new technology.
How you make a balance between your various passions, your work and your family?
I believe in 6 days hard work, spending Saturday night with friends and full Sunday with family.
What is your routine like?
My normal work day ends at 7.30 pm at office, then I walk and exercise between 8.00 pm to 9:00 pm, then have my dinner, watch some TV shows and sleep by 11:00 pm
What’s the best and worst career advice you have been given?
Best career advice was “keep trying until you succeed”. I have forgotten the worst career advice as not worth remembering!
What would you like your children to be in life?
Dare Devils! Have no Fear, try new things, never give up and pursue success until they achieve in whatever they want to achieve!
Your defining moments?
When God blessed me with a daughter!
Which of your personality traits, you feel, has not been widely known? (People would be surprised if they knew?)
I am known to be strong and rigid. Actually, I have a very soft heart and can be easily emotionally won over.
Any regrets that you wish to share(you missed the bus in your business journey)?
No regrets. One makes good decisions and bad decisions. I have always believed to learn from mistakes and move forward.
What do you do to relax?
I meditate very early in the morning when the world is sleeping.
Your favourite travel spot?
Any nice quaint town in Western Europe having roadside cafeteria.
What book did you read last?
Autobiography of a Yogi.
You would like to be reborn as?
I would prefer to escape the cycle of life and death and not get reborn!