It was a good year for the numero uno
in the telecom cable industry. Sterlite Industries (India) Ltd posted a growth of 22
percent to clock revenues of Rs 562 crore for 1998-99 compared to Rs 459.28 crore in
1997-98. The country’s largest manufacturer of Jelly Filled Telecom Cables (JFTC)
grew by more than the cable industry growth rate last year, which was around 15 percent.
Sterlite also became the leading supplier of Optical Fiber Telecom Cables (OFTC).
Year Of Start-up: 1975
Area Of Operation: Telecom cables, optical fibre cables
Address: Dhanraj Mahal, 5th Floor, CSM Road, Apollo Bunder, Mumbai -
400 039
Tel.: 022-2855551/2836474
Fax: 022-2836474
Website: www.sterlite.com
JFTC output increased by over 75 percent
while that of OFTC increased by over 100 percent for Sterlite. The supply of JFTC took
a
leap to 57.79 lckm in the nine months ending March 1999, as against 32.88 lckm for the
corresponding period in 1998. In the case of OFTC, the sales of the first nine months were
around 85,281 fkm as compared to 52,000 fkm of the previous year. The company also
achieved the highest production of optical fibre in the country. Last year, the sales of
optical fibre increased to 132,718 kilometre from 89,270, an increase of 49 percent.
The company claims to hold a marketshare of
16 percent in JFTC and 29 percent in OFTC. It is also the largest supplier of OFTC to the
Indian Railways with an installed productioncapacity 350,000 fkm. Further, it has been
able to improve the margins, which were under pressure in the recent past, due to
operational efficiencies, increased productivity and also reduction in key raw material
prices.
During the current fiscal, the market size
for JFTC in the country is estimated to increase to 510 lckm from the previous year’s
figure of 388 lckm and in revenue terms this would mean a whopping Rs 3,300
crore. The DoT
has projected a requirement for over 450 lckm for the year 1999-2000 at a value of Rs
3,100 crore. Of this, the tender for 366 lckm has already opened in March 1999. Besides,
MTNL is expected to announce tender for about 55 lckm shortly. Both the DoT and MTNL are
expected to purchase about 500-510 lckm of JFTC during the current fiscal which means a
volume growth of about 25 percent. Sterlite, with a production capacity of 100
lckm, would
be the largest beneficiary of this spurt in demand. The company, along with its subsidiary
arm, expects to get over 89 lckm order in 1999-2000, highest in the industry.
As for optical fibre, the DoT has doubled
the tender size for 1999-2000 to over 70,000 kilometre. In revenue terms this would be
around Rs 350 crore. With the advantage of backward integration into optical
fibre,
Sterlite is expecting an order for about 22,000 kilometre, which will be over two times
the orders received during the last fiscal.
Given the advantages of low capital cost,
operational cost and location in backward area, Sterlite should be able to maintain its
marketshare in JFTC taking into account the enhanced market size. The company enjoys
similar advantages in OFTC too. In this business, it is learnt to have secured some major
export orders from South America and intends to export 30 percent of its total
production.
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