KEI Greenfield capex to surge to ₹1000 Cr over next 3 years

The company is further strengthening its product wire and cable portfolio for segments such as oil and gas, infrastructure, solar, wind, power transmission and distribution projects, agriculture and EVs.

KEI Industries is set to revolutionise the electrical industry with a focus on high-end speciality cables. Anil Gupta shares his views on the industry in an interview with the EPR Magazine.

What strategies and innovations has KEI implemented to achieve and sustain its impressive annual growth rate?

Since 1968, KEI has established a significant presence in the Indian market. Over the past five decades, we have evolved into a multinational conglomerate renowned for delivering tailored solutions in the B2B sector and maintaining a robust B2C retail presence. With a rich heritage spanning 55 years and a diverse product portfolio encompassing wires ranging from 1 KV to 400 KV, KEI stands out as the sole brand that has consistently achieved an impressive annual growth rate of over 20% in the past five years, excluding the challenging Covid period. Currently, we operate five state-of-the-art manufacturing facilities.

The prospects for KEI wires and cables shine brightly, especially compared to our competitors. Our unwavering commitment to innovation and dedication to offering top-notch products and services place KEI in a favourable position for sustained growth and expanding our market share. Furthermore, KEI boasts NABL-accredited laboratories and has cultivated a sterling reputation for reliability and exceptional customer service, further reinforcing our competitive edge. Despite the emergence of formidable rivals, KEI is primed to retain its leadership position in the wires and cables industry.

How does the company plan to capitalise on the growing demand for wires and cables across various sectors?

We are increasing our greenfield capex approximately to Rs 1000 cr. In the coming three years this will help us to cater to the rising demand for wires and cables. We are further strengthening our product wire and cable portfolio for many sectors into speciality segments such as oil and gas, infrastructure, solar, wind, power transmission and distribution projects, agriculture, EV (electric vehicles), and various commercial needs. We will continue to remain focused on the wire and cable products and will put more emphasis on growing our customer base worldwide.

The government’s substantial increase in capital expenditure (capex) from 7.28 lakh crore in the last financial year to 10 lakh crore presents a significant opportunity for economic growth. This boost in infrastructure development has a ripple effect on various sectors, including wire and cable products. The demand for these products is set to surge in both B2B and B2C segments.

Government initiatives to support domestic manufacturing and infrastructure have laid the foundation for the wire and cable sector’s growth. The solar energy projects in the country have generated substantial demand for these products.

Furthermore, power distribution companies invest in Rural Distribution Strengthening Scheme (RDSS) projects, spurred by numerous distribution firms and funded by institutions like PFC and REC. As the manufacturing sector experiences a resurgence, private capital expenditures are expected to rise, particularly in industries like steel, oil and gas, petrochemicals, cement, and more, driven by the government’s emphasis on production-linked incentives (PLI) for manufacturing projects. The real estate sector’s revival is also anticipated to create opportunities, especially in the house wire segment.

The market is poised to shift towards high-end speciality cables, responding to the growing prevalence of Internet of Things (IoT) devices. The wire and cable industry’s prospects are bright, focusing on renewable energy sources like solar and wind power, supported by increased investments in research and development and the adoption of cutting-edge technologies such as 5G. Combined, the wire and cable industry is primed for substantial growth in the coming years.

 How will the company address the challenges of competition and fluctuating copper prices in this dynamic industry landscape?

In the next five years, KEI is poised to achieve an annual revenue of Rs 14,000 crore, driven by a strategic expansion of our wires and cables product range. Presently, we operate in over 55 countries, with a strong emphasis on expanding our presence and exports in developed markets such as the U.S., Europe, and Australia. With a rich history of delivering high-quality electrical solutions, our commitment to customer needs and environmental sustainability remains unwavering. The future of KEI wires and cables looks promising, and we will continue to be a leader in the industry by providing excellent, world-class products and services.

KEI Industries, with a registered top line of INR 6912 crore, has seen significant 10-year growth at a CAGR of 17.5 percent. The industry’s projected growth, driven by technology advancements and demand from sectors like construction, automotive, and telecommunications, aligns with KEI’s outlook to achieve a 15-17 percent top-line and 18-20 percent bottom-line growth in FY 2023-2024. Additionally, the company plans to expand its manufacturing capacity with new lines at Silvasa and Pathredi plants.

The wire and cable industry is experiencing unprecedented growth driven by technological integration. Wires and cables are pivotal in expanding data centres and IT facilities and ensuring secure connectivity. The emergence of next-gen gadgets, 5G and 6G services, the Revamped Distribution Sector Scheme (RDSS), EV charging products, and export potential accelerate the industry’s evolution. Specific segments like railway and solar cables are poised for heightened demand. Despite this growth, fierce competition from local and international players poses a continuous challenge. 

Additionally, fluctuating copper prices demand agility in product and process improvement to stay ahead and capitalise on emerging opportunities. The wire and cable industry is dynamic, adapting to meet evolving connectivity needs.

How will you use government initiatives like the PLI scheme to aid your greenfield expansion?

We’re embarking on a massive Rs 1000 cr greenfield expansion over the next three years, the largest in KEI’s history, in Sanand, Gujarat. This milestone will facilitate the introduction of new wire and cable products for speciality sectors.

As we expand beyond 60 countries, we encounter varying standards and certifications required to market our wire and cable products in sectors like solar, wind, power transmission, and distribution.

India’s electrical sector is evolving, driven by sustained economic growth and increasing electricity demand. With a strong infrastructure pipeline and government focus on railways, metro systems, highways, and real estate, we anticipate robust cable demand in the coming years.

The government’s initiatives, including the PLI scheme for high-efficiency solar modules, photovoltaic cells, and battery-backed power storage infrastructure, aim to strengthen the Indian power sector.

Spokesperson– Anil Gupta, CMD- KEI Industries Ltd.