Indian telecom product supplier, HFCL (Himachal Futuristic Communications Limited) plans to expand its fiber optic cable manufacturing facility in Hyderabad. A proposal to enhance the capacity to manufacture fiber optic cable has been approved by the board of directors of the company in a meeting held on 7 January 2019.
The current decision is to enhance the production capacity by 3.5 million FKM (Fiber Kilometers). This is in addition to the 7 million FKM capacity enhancement, the work of which is in progress. The cable maker has an existing production capacity of 8 million FKM. An investment of approximately US$5 million is required to accomplish the capacity enhancement. The capacity enhancement work is expected to be completed by June 2019. See the below summary;
Existing fiber optic cable production capacity: 8 million FKM
Capacity increase work in progress: 7 million FKM
Current Additional capacity approved by the board: 3.5 million FKM
Total fiber optic cable production capacity after completing all the work: 18.5 million FKM. Existing capacity utilization is calculated at 96%, which is quite good in terms of the manufacturing capability of the machines and manpower.
In an official letter issued to the Secretary of the national stock exchange of India Limited, the company stated its decision as below;
The Board of Directors of the Company at its Meeting held on 7th January, 2019 approved the proposal of enhancing the additional manufacturing capacity of Optical Fibre Cable (OFC) at Hyderabad from 7 million Fibre Kilometer (FKM) to 10.5 million FKM where the Company is already setting up Optical Fibre (OF) and OFC manufacturing Facilities.
HFCL has a fiber optic cable production facility in Goa. HFCL had recently set up a manufacturing facility for drawing optical fibers in India. The current proposal is to enhance the production capacity of fiber optic cables in its Hyderabad cable factory, where the company is already producing the cables and supplying to Indian and overseas customers.
Himachal Futuristic Communications Ltd (HFCL) is one of the leading fiber optic cable manufacturers in India. HFCL specializes in the manufacturing of telecommunication equipment, Optical fiber, cables, and power systems. HFCL had done several greenfield projects that include setting up of CDMA and GSM networks, Satellite Communications, Wireless Spectrum Management, and DWDM Optical Transmission Networks.
Summary of Capacity Enhancement Approval by the board;
– Existing capacity: 8 million FKM approx.
– Exiting capacity utilization: 96%
– Work in progress: 7 million FKM
– Proposed capacity enhancement in addition to (c) above: 3.5 million FKM
– Post capacity addition: 18.5 million FKM
– The period within which the proposed Capacity is to be added: By June 2019
– Additional Investment required for enhancement of capacity: Rs.35 Crores (Indian Rupees)
– Mode of financing: Internal accruals/Term Loans
– Rationale: Increase in demand of Optical Fibre Cable in India as well as World Market.