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HFCL to Set up Fiber Cable Factory in Poland

HFCL (Himachal Futuristic Communications Ltd), a leading fiber optic cable producer in India announced it's decision to set up a manufacturing plan in Poland for optical fiber cables. HFCL will invest around US$17.4 million initially to set up this plant.  The manufacturing plant in Poland, initially starting with a capacity of 3.25 million fiber kilometers scalable up to 7 million fiber kilometers.

HFCL is an Indian technology company, based in Gurgaon (Gurugram). The company designs, develops, manufactures telecommunications equipment, optical fibers, fiber optic cables and opto electronics.

This is a strategic move by HFCL to move to Europe at a time when the demand for optical fiber cables are increasing in the European countries. The establishment of a cutting-edge optical fiber cable manufacturing plant in Poland will help HFCL to cater to the rising demand for OFC in key European markets such as the UK, Germany, Belgium, France, and Poland.

With goals to increase the share of exports in its fiber optic cable vertical revenue from 30 per cent to 70 per cent within the next 4-5 years, HFCL eyes on Europe as a pivotal focus for its growth initiatives. The demand for optical fiber cables in the European market is projected to grow at a CAGR of 4.5 per cent over the next 5 years. The expected demand will reach 90 million fiber kilometers per annum by 2028.

It is also interesting to note that HFCL is setting up the manufacturing plant in Poland when the price of optical fibers is at a historically low level. HFCL has started fiber drawing facility in India, where the company produce optical fibers. HFCL's fiber cable manufacturing company in Goa, from where the company started growing its presence in the field of fiber cable manufacturing is situated in Verna Industrial Area.

The move towardsFTTH connectivity, with an estimated 308 million homes in the EU region set to have FTTH connectivity by 2028, is driving the rapid expansion of FTTH networks and subsequently increasing the demand for fiber optic cables. Poland was chosen as the location for the manufacturing plant considering the market access to other European nations, incentive programs, cost competitiveness, strong connectivity, and a skilled workforce at relatively lower labor costs.

Recently, the EU has announced an anti dumping investigation against fiber cable companies from India. In response to recent geopolitical developments and potential regulatory shifts, HFCL's decision to establish a manufacturing presence in Europe aims to mitigate risks and ensure enhanced access to target markets.

This strategic move is expected to enhance HFCL's agility, reduce transit times, and increase order fulfillment capacity. The establishment of the manufacturing facility will be facilitated through the incorporation of a new subsidiary under HFCL B.V., the company's wholly-owned subsidiary in the Netherlands.

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This could be a move to counter the recent anti-dumping law by European Union against the Indian fiber optic cable manufacturers. Indian companies, not all the companies, but a number of them such as Sterlite, HFCL, Aksh Optifibre, Birla, Finolex, etc have been supplying optical fiber cables to customers in Europe. Chinese companies also started supplying to this market, which has resulted in heavy competition between Chinese and Indian cable manufacturers.

Prices of optical fiber cables fell down due to this competition between Chinese and Indian suppliers. Optical fiber prices are already at the rock bottom stage. This coupled with the declining cable prices due to competition has made the local European cable makers in a difficult situation as most of them are on the edge of bankrupt. Local European cable makers are unable to compete with these Indian and Chinese cable suppliers since their overheads are higher.

European Union has decided to launch an investigation against the dumping cases of optical fiber cables from India. As per this investigation news published in the news media, Indian cable makers are cheaper than 35% of the European cable makers.

The move by HFCL is the right set up a manufacturing facility for cables in Europe itself to serve the market. This way, HFCL can create jobs for Europeans and in return they can sell their cables to the local market.