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Crisis Entangles Ghaziabad Wire and Cable Manufacturing Industry

by wireworld on 07/11/2012 - 07:23 pm

Tag: Press Releases

Wire and cable manufacturing industry in  Ghaziabad is entangled in looking for a solution for credit crunch, unavailability of raw materials along with intermittent power supply. All these factors are depriving the industry the opportunity to move forward. While industrialists see no end to the gloom any time soon, the unfortunate part is the non-availability of any solution in sight to put an end to the ordeal. 


"Most of government organisations in the country, be it the state electricity board or the railways, is running under tremendous loss," rued RK Jain, director of UP Tele Links Limited. The two-decade-old company is one of the biggest cable manufacturers in Ghaziabad and has an enviable clientele that includes the likes of  VSNLBharti Airtel, Ericsson and  NTPC etc. The company specializes in 100 different types of cables used for electric, telecommunications and data works.


Echoing similar sentiments, Raghvendra Goyal, director of Pasondia Cable Private Limited said, "The state's various electricity boards are the biggest defaulters. They hold back payments sometimes for as long as eight months. They give high value bulk orders."


There have been cases when the cheques have bounced but action against repeated delays could not be taken because it is a cumbersome thing to take on a government entity, highlighted Goyal. He also said that even the private sector is feeling the heat to some extent.


The stalling of funds has a cascading affect, maintained the industrialists, as the whole supply chain gets influenced disturbing the entire applecart. "One holds the payment of the other organization. Subsequently the other does not clear payments of the next in the chain and this goes on," clarified Jain.



There is also a clamour about making a cluster for wire and cable manufactures. The argument put forward is the non-availability of raw materials. Sachin Edwards, regional manager (RM), Basant Insulators made his case, "There should be a separate cluster for wire and cable manufacturers."


Supporting Edwards' viewpoint, his fellow industrialist Sunil Rastogi pointed out, "This will solve problems of raw material to some extent. The cluster will cater to various demands of the sector. It will also cut down on cost." Rastogi is the owner of Ghaziabad Flopol Insulations Private Limited.


Basant Insulators has been in Ghaziabad since 10 years and has been catering to the demands of coaxial cable, electrical wire, high voltage power cables, industrial wires. It is also into exports. Ghaziabad Flopol, a `13-14 crore turnover company is based in New Meerut Road Industrial Area and has expertise in high temperature wires, insulated wires & cables and multicore cable.


Comparison with Delhi always comes to the fore. "Ghaziabad is not that conducive place for a local market. The market for finished goods is not as good as that in Delhi," remarked Jain. Edwards said, "It is much easier to put up an industry in  the nationalcapital."




The power problem has grappled the industries as a whole in Ghaziabad, a fact acknowledged by all in the city. But there is a demand from the players to the government to charge only for the electricity that is used by players. "We want to pay for what we consume. With a regular cut of 10-12 hours in a day, and having forced to pay for the entire load that we have taken from the electricity boards, there is too much burden on the players," said a city-based player  Ankit Sharma of JP enterprises. The 20 year old company supplies across India. Citing example of Delhi he added, "There the players are allowed to pay as per their usage."


Jain of UP Telelinks said that generator cost and overtime has escalated the input cost further.  The move will help players recover some cost said everyone unanimously.


All this has dented the image of the industry in a big way feels Sunil Singh of Dynamic Cables Private Limited. "To recover the cost people have started compromising with the quality. The end user does not know about the quality of the product when he buys one." Singh's company is another major player with its presence since 15 years. The turnover of the company is over Rs 250 crore. It makes industrial cables.


While Micron System & Controls Private Limited is one of the major sufferers in the region with its production going down by almost 50 percent. The managing director of the company, Deepak Gupta said that this sharp decline has come in a matter of just three years.



But Raghvendra Goyal of Pasondia Cable Private Limited still sees some silver lining in the situation. "Despite crunch in credit the demand is still there with different sectors approaching his company." The director of `45 crore company feels that the industry is going through a metamorphosis and one can sustain through technology upgradation and innovation.


And some like RK Jain of UP Telelinks is pragmatically diversifying his business. The company's resolve to  touch $ 20 million has taken a beating by another year due to  2G scam but Jain is hopeful that diversification will help them achieve that by 2013.