Bounceback-ability is the new buzz. It reminds me of a Robin Williams film ‘’Flubber’’ where he sprays liquid rubber on a basketball and the ball bounces higher and higher. Can this happen to our economy?
The Trillion Rupee fund to boost agri-infrastructure launched by the Government gives one confidence that the agriculture sector which was one of the sectors badly hit by Covid, is likely to see an upturn. Even prior to the pandemic this sector needed a holistic solution to post-harvest management and marketing of agricultural produce and a buildup of community assets.
Loans up to Rs. 2 Crore will be disbursed with a 3% interest subsidy through cooperative societies, farmer producer companies, self-help groups, entrepreneurs, startups and infrastructure providers. Over the next three years this sector can expect to receive Rs. 40,000 Crores. Rs.17,100 Crores has also been transferred to farmers under the PM Kisan Direct Income assistance scheme. Earlier, the PM has also flagged off new facilities like Kisan Rail, which is expected to connect markets across the nation.
With such significant investment into this sector, if executed efficiently, this sector will bounce back and go beyond pre-Covid levels.
Cabling need in the Agri-Infra industry: An opportunity
The Government has done well by addressing the agricultural sector. Money is reaching farmers who will soon have disposable income which should lead to increased consumption. But if the cycle of increased incomes has to turn to increased consumption which in turn jump starts other depressed sectors there has to be a holistic perspective to fixing the economy.
With the importance given to infrastructure providers there will be an increased demand and greater consumption of steel and cement. People in these industries will then have income to spend on TVs, fridges, dishwashers etc. which helps ease of living.
What runs as a common thread in addressing and fixing this cycle of investment, generation of demand, consumption which would lead to higher standards of living, is the need for augmented power generation that is much more than what is presently.
Electrification of villages through the schemes run by the Government are supposed to be 99% complete. Work on sustainable energy generation is on the anvil. But with the new investment in the agri-infra there will be a significant requirement for cables and cable sheathing.
New Connections: Yet another opportunity
On August 11, 2020 the government launched optical fiber link between Chennai and Port Blair. Cabling here is expected to boost 4G mobile services and digital services such as tele-education, tele-health, e-governance and tourism.
Countries are looking for alternate suppliers due to the Covid pandemic. Most countries have high labour costs and find producing cables in their own countries economically unviable, which was one of the reasons they had moved to procuring cables from countries with lower costs. We should be thinking of making high quality products which can be sold not only in India but to other countries as well.
Focus on high quality: Export potential
Herein lies the opportunity for our Indian cable making companies go beyond domestic consumption.
The majority of cable sheathing is made from PVC. These cables are easier to manufacture as it requires lesser equipment, therefore lesser capex.
But high-quality sheathing is made from rubber. Using peroxide cured EDPM rubber gives better Corona discharge and arc resistance. Its breakdown voltage resistance is also better. This is applicable for electricals mats also. It also gives excellent heat resistant characteristics, flexibility, durability, tear resistance, abrasion resistance, melt resistance, water and chemical resistance and impact resistance. It is more durable in harsh conditions.
By looking at the export market at this time we should be looking at manufacturing high quality products which can be sold not only in India but to other countries as well.