The Finolex group has initiated steps to cash in on the new generation needs in the automobile, IT and telecommunication sectors by introducing new generation cables, including foam skin cables for telephones, 105-degree auto cables for automobile harnesses, and hybrid coaxial cables for the IT/telecommunication convergence industry.

All the three new products will be manufactured at the company’s new unit at Verna, Goa, where a 30,000 lakh-cable-km unit has been in production since December 1999, making solid skin jelly filled telecom cables. The company will make fresh investments of Rs 200 crore into the new product lines.

"The rest of the world, including African countries, have switched over to foam skin cables which use 8 per cent less raw material, are more flexible and have better electric properties," says Mr. P.P. Chhabria, chairman of the Finolex group of industries. "India is now planning to switch over, with the new DoT specifications expected shortly."

Finolex expects to gain in other ways from this switchover, apart from the new demand coming from private sector operators and exports. It has already secured a $6.9 million order for foam skin cables from an African country.

The Department of Telecommunications alone has an annual requirement valued at Rs 3,000-3,500 crore. "The government is in a position to save Rs 500 crore through switching over to foam skin cables," says Mr Chhabria.

Finolex is even planning switching over its production at Urse, near Pune, from jelly filled telephone cables to foam skin cables by 2002, he adds, depending on the demand profile.

In the automobile sector, Finolex proposes to cash in on the entry of new generation, electronics-dependent high-speed automobiles. The vehicles are subjected to higher temperatures due to the higher speeds, and more electronic control calls for more robust and reliable cabling. Here Finolex will gain from being first off the block with 105-degree temperature resistant cables used for making automobile harnesses. Hitherto, the cables available have temperature resistance of up to 70 degrees.

For the IT and communications sector, Finolex Cables will be producing hybrid coaxial cables that will serve the convergent technology market for data, voice and image communication. These RG 500 cables will serve the higher bandwidth needs of ISPs and cable operators for Internet-connected TVs, computers and telephones. Sales from hybrid coaxial cables alone are expected to add Rs 150 crore to the turnover of the Rs 576 crore company in a year''s time.

All the new product lines are expected to be in place by December 2000 and contribute Rs 500 crore to the company''s topline by 2001-2002. Net margins, which are currently at 12 per cent, will go up to 15 per cent, according to Mr Chhabria''s estimates.

Finolex also plans to go closer to the customer, with a new cable plant envisaged at Pondicherry (see ). Besides, expansions on existing capacities are expected to take off immediately (see ).