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Analysis of the power cable market in India

Release date 20.08.2022

Number of pages 44

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The relevance of research

A power cable is a large group of cables with different design and electrical characteristics. Power cables are necessary for the transmission of electricity (3-phase current) from the source to the end consumer. The choice of the type of power cable depends on the object to be connected and the installation conditions of the power cable.

Purpose of the study

Analyzing the state of the power cable market in India, assessing the market size, analyzing competitors, and identifying factors affecting the power cable market

Content

Part 1. Overview of the Indian Power Cable Market

1.1.Main characteristics of the market

1.2. Dynamics of the market volume of power cables 2017-2021 Potential market capacity

1.3. Assessment of factors affecting the market

1.4. Power Cable Market Life Cycle Stage

1.5. Competition from substitute products

Part 2. Competitive analysis in the power cable market

2.1. Major players in the market

2.2. Market shares of the largest competitors

2.3. Profiles of major players

Part 3. Analysis of the production of power cables

3.1. Volume and dynamics of domestic production of power cables

3.2. Share of exports in the production of power cables

3.3. Segmentation of power cable production by regions

3.3.1. Production by Union Territories

3.3.2. Production by states of India

Part 4. Analysis of foreign trade supplies of power cables

4.1. Volume and dynamics of import of power cables

4.2. Import structure

4.3. Volume and dynamics of export of power cables

4.4. Export structure

Part 5. Power Cable Consumption Analysis

5.1. Dynamics of consumption of power cables

5.2. Analysis of the results of tenders for the purchase

Part 6. Price Analysis

6.1. Average producer prices by union territories

6.2. Average consumer prices by states in India

Part 7. Assessment of factors of investment attractiveness of the market

Part 8. Forecast for the development of the power cable market until 2026

Part 9. Recommendations and conclusions

Research excerpt

Part 1. Overview of the Indian Power Cable Market

1.1. Main characteristics of the market

Usually, during the construction of certain objects, an electrical network project is drawn up, which indicates the required characteristics of the cable based on the number of connected objects, power, line length and many other parameters in accordance with which cable grades are selected.

Here is an enlarged classification, the most common in the cable environment. Power cables can be classified:

By voltage:

low voltage power cables: 0,66 kV, 1 kV, 3 kV, 6 kV, 10 kV, 20 kV, 35 kV;
high voltage power cables: 110 kV, 220 kV, 330 kV, 380 kV, 500 kV, 750 kV and above.

Insulation material:

plastic
polyethylene
Rubber
paper

According to the material and shape of current-carrying conductors:

aluminum
copper
round
sector or segment shape lived.

The Indian power cable market is dominated by domestic products. In the analyzed period, the share of domestic products is ...% of the market volume.

1.2. Dynamics of the market volume of power cables 2017-2021 Potential market capacity

In general, over the period under study, the volume of the power cable market grew almost three times. This was facilitated by the resumption of investment programs and the need to modernize old, worn-out cable systems. Also, the dynamics of the market volume is influenced by the cost of metals.

Diagram 2. Dynamics of the market volume of power cables, 2017-2021, billion Rs.

The main volume of power cables is represented by cables for voltage up to 1 kV, intended for stationary laying. At the same time, copper is the most common material used as a conductor in cables, due to its high electrical conductivity.

The main consumers of cable and wire products are the fuel and energy and construction industries, as well as industry and the military-industrial complex.

The potential of the power cable market is assessed by GidMarket analysts as ""plus"" 100%, which will be associated with the expansion of the domestic market in connection with the import substitution policy - new enterprises and production sites will appear, automatically increasing the overall demand for power cables. Also, due to the increase in the cost of raw materials, the cost of final products will also increase, which, among other things, will increase the market volume in monetary terms. However, the achievement of potential capacity will be held back by the unstable economic situation and a temporary deterioration in solvency.

In the structure of revenue throughout the entire period under review, the Volga Federal District is in the lead with shares within ...

1.3. Assessment of factors affecting the market

Let's consider the main factors influencing the market and, accordingly, demand.

Economic

India GDP

GDP is a macroeconomic indicator that reflects the market value of all final goods and services produced in a year in all sectors of the economy on the territory of the state for consumption, export and accumulation. The dynamics of India's GDP is decisive in the vector of development of the entire economy of the country and determines the key trends in consumer effective demand and economic activity.

...

Industrial Production Index

The production index is a relative indicator that characterizes the change in the scale of total industrial production in India in the periods being compared.

Chart 6. Indian Industrial Production Index, 2012–Oct. 2021, % to the previous year

Metals prices

Even domestically, cable plants buy copper at the rate of the London Non-Ferrous Metal Exchange (LME). The price is set in dollars. Copper prices rose sharply after the start of the Indian military operation in Ukraine, as disruptions to trade routes and economic sanctions led to supply disruptions.

...

Социальные

Population

The current demographic situation in India is characterized by natural population decline (since 2017), which is accelerating, and migration growth, which does not compensate for natural decline.

...

Real income of the population

...

technological

Counterfeit

Cable falsification appeared on the market in large numbers in 2008 during the economic crisis and manufacturers and distributors were looking for ways to reduce the cost of production.

...

Buyers using low-quality cables endanger the safety of facilities and people's lives, incur increased operating costs (energy consumption, repairs, cable replacement in case of failure). Negative influence of the factor.

Indian Manufacturing Capabilities

Despite the emerging difficulties in relations with partners and suppliers, Indian cable plants have the opportunity to build production in such a way as to fully satisfy the needs of the domestic market.

Political

New GOST requirements

From 1 Sept. 2021, all plastic insulated power cables in India must be produced in accordance with Amendment No. 1 to GOST 31996-2012.

The changes affected the thickness of the cable sheath and the technology for filling the outer gaps between the insulated cores; new materials and designations were also introduced into GOST.

...

Import substitution

Import substitution in the domestic cable industry receives significant advantages. Firstly, the cost of production is less due to savings directly on transportation costs. Secondly, the delivery time of the goods is reduced. At the same time, the responsibility of producers is increasing, tax deductions to the budgets of various levels are increasing, and new jobs are being created.

Also, in general, in India, infrastructure facilities are being reconstructed, manufacturing enterprises are developing, etc., which favorably affects the growth in demand for cable and wire products.

However, there are a number of problems in the field of import substitution in the Indian cable industry, including: the lack of structured information about cable and wire products that need to be replaced; lack of a state support program for the implementation of capital-intensive projects to create new cable production facilities; lack of selection criteria for companies admitted to the production of products under the import substitution program, etc.

Concluding the assessment of the factors influencing the power cable market, let's summarize the key ones in the framework of the STEP-analysis.

According to the results of the performed STEP-analysis, macro-environment factors have a negative impact on the development of the power cable services market to a greater extent.

Table 2. STEP analysis of factors affecting the power cable market

1.4. Power Cable Market Life Cycle Stage

The power cable market is in the stage of maturity.

...

The maturity stage is built on the consumption of conservative consumers, on the popularity and wide representation of the product, which ensures a stable level of sales over a long period.

1.5. Competition from substitute products

Complex technical power lines (TL) are used to deliver electricity over long distances. On a national scale, they are strategically important facilities that are designed and built in accordance with SNiP and PUE. These linear sections are classified into cable and overhead power lines, the installation and installation of which require mandatory compliance with the design conditions and the installation of special structures.

From this position, the power cable market is experiencing competition from wires for power lines.

Cable systems (power cables) have a significant advantage over overhead power lines. They are more compact, take up less space, but are safer, more reliable and more convenient to use. Therefore, most of the electrical networks at manufacturing enterprises, in cities and large settlements are built using cable products.

The transmission of electricity over long distances is accompanied by large power losses in the line, which is a significant problem for the electric power industry. An alternative to traditional overhead and cable power lines can be GIL - gas-insulated power lines. This type of lines has a number of advantages and is more reliable in operation.

...

Part 2. Competitive analysis in the power cable market

2.1. Major players in the market

The power cable market is highly competitive.

From the point of view of competitive concentration, the studied market belongs to low-concentration (Herfindahl-Hirschman index (HHI < 1000). Mergers and acquisitions are allowed without hindrance.

...

2.2. Market shares of the largest competitors

Estimating the shares of companies is complicated by the existing error, which is associated with the impossibility of dividing the proceeds from the sale of power cables and other categories of products.

However, the largest power cable market operators in India are...

...

Diagram 10. Shares of the largest competitors in the power cable market in 2021, %

2.3. Profiles of major players

XXX

...

XXX

...

XXX

...

XXX

...

Part 3. Analysis of the production of power cables

3.1. Volume and dynamics of domestic production of power cables

The production of power cables shows growth every year, but the growth rate is slowing down.

The dynamics of the total revenue of the largest manufacturers of power cables in 2021 according to GidMarket...

3.2. Share of exports in the production of power cables

For the period 2017-2021 share of exports in the production of power cables ...

3.3. Segmentation of power cable production by regions

3.3.1. Production by Union Territories

The largest production volume of power cables among all federal districts in 2021 falls on the Central Federal District with a share of ...

Table 5. Dynamics of power cable production in India by union territories, 2017-2021, km

3.3.2. Production by states of India

The largest power cable manufacturing states in India in 2021 were: ...

Part 4. Analysis of foreign trade supplies of power cables

4.1. Volume and dynamics of import of power cables

During the period under study, imports of power cables in physical terms decreased annually.

...

4.2. Import structure

In the structure of power cable imports by importing countries in 2021, the key supplier is ...

...

4.3. Volume and dynamics of export of power cables

The volume of exports of power cables from India shows multi-vector dynamics, however, in general, the dynamics are positive ...

Diagram 19. Balance of exports and imports, 2017-2021, million Rs.

4.4. Export structure

The main volume of exported power cables in value terms in 2021 was supplied ...

Part 5. Power Cable Consumption Analysis

5.1. Dynamics of consumption of power cables

Estimation of consumption volume per capita was made by GidMarket on the basis of the ratio of the power cable market volume to the population of India.

...

5.2. Analysis of the results of tenders for the purchase

For 2020–Jul. 2022 about 14 thousand tenders for the purchase of power cables were held. Most of the tenders were held in the form of an electronic auction ...

There are tenders where in one purchase, in addition to power cables, there are other types of cable and wire products. Due to the large number of tenders for the purchase of power cables, the table includes completed tenders with contract amounts of more than 120 million Rs.

Supplies of power cables are also found in tenders for construction, installation and commissioning of power supply system equipment, emergency repairs. Tenders that include services other than the supply of goods are not included in the table.

...

Part 6. Price Analysis

6.1. Average producer prices by union territories

Prices for power cables depend on the type of insulation, the material and shape of current-carrying conductors, design features and the cost of raw materials. Also, the final cost depends on the volume of the lot and the individual conditions of the order.

Here are the average producer prices for the largest group of power cables - for stationary laying for voltages up to 1 kV.

...

6.2. Average consumer prices by states in India

Here are the average consumer prices for power cables in some regions of India...

...

Part 7. Assessment of factors of investment attractiveness of the market

...

Negative factors of the investment climate in the power cable market dominate over the positive ones.

...

Among the most significant positive factors are: ...

The most significant negative factors: ...

Part 8. Forecast for the development of the power cable market until 2026

The external environment for the Indian economy remains challenging and significantly limits economic activity.

...

The following factors also make it possible to predict the dynamics of the power cable market:

...

Part 9. Recommendations and conclusions

During the period under study, the volume of the power cable market grew almost three times. This was facilitated by the resumption of investment programs and the need to modernize old, worn-out cable systems.

...

Macro-environment factors have a negative impact on the development of the power cable services market to a greater extent. The main negative impact is exerted by: an unstable economic situation, which is expressed, among other things, in the volatility of prices for raw materials; the presence of falsification in the market, which increases during periods of crisis, a decrease in income. The main positive impact on the market is provided by the ability of Indian manufacturers to fully cover the needs for power cables in the Indian market.

A comprehensive assessment of investment attractiveness factors demonstrates a neutral investment climate.

In general, the power cable market is attractive due to its stability and demand in a wide range of industries. At the same time, the lack of drivers for active growth provokes fierce competition between existing operators.

For both new and existing operators in the power cable market, the following recommendations can be made:

...

Diagrams

Diagram 1. The ratio of imported and domestic products in the power cable market, 2017-2021, %

Diagram 2. Dynamics of the market volume of power cables, 2017-2021, billion Rs.

Diagram 3. Revenue (net) from the sale of power cables in the union territories for 2017-2021, %

Chart 4. Dynamics of India's GDP, 2013–Jun. 2022, % to the previous year

Chart 5. Monthly dynamics of the US dollar against the rupee, 2017-Jul. 2022, Rs. for 1 US dollar

Chart 6. Indian Industrial Production Index, 2012–Oct. 2021, % to the previous year

Diagram 7. Population dynamics in India, as of 01 Jan. 2013–2022, million people

Diagram 8. Dynamics of real incomes of the population of India, 2013–Jun. 2022, %

Diagram 9. Industry life cycle stage

Diagram 10. Shares of the largest competitors in the power cable market in 2021, %

Diagram 11. Dynamics of production volumes of power cables in India for 2017-2021, thousand km

Diagram 12. Dynamics of the total revenue of the largest manufacturers (TOP-5) of power cables in India, 2017-2021, million Rs.

Diagram 13. The share of exports in production for 2017-2021, %

Diagram 14. Structure of production of power cables by states of India,%, 2021

Diagram 15. Volume and dynamics of imports of power cables in physical terms, 2017-2021, thousand tons

Diagram 16. Volume and dynamics of imports of power cables in monetary terms, 2017-2021, mln USD

Diagram 17. Dynamics of export of power cables in physical terms, 2017-2021, thousand tons

Diagram 18. Dynamics of export of power cables in monetary terms, 2017-2021, mln USD

Diagram 19. Balance of exports and imports, 2017-2021, million Rs.

Chart 20. Structure of exports by countries in 2021, %

Diagram 21. Dynamics of consumption of power cables in monetary terms, 2017-2021, Rs./person

Diagram 22. Structure of supply of power cables by customers among contracts worth more than 120 million Rs. in 2020–Jul. 2022, %

Chart 24. Forecast of the market size in 2022-2026, billion Rs.

Tables

Table 1. Expert forecasts for the decline in real GDP in India in 2022, %

Table 2. STEP analysis of factors affecting the power cable market

Table 3. The main companies participating in the power cable market in 2021

Table 4. Profiles of companies participating in the power cable market in 2021

Table 5. Dynamics of power cable production in India by union territories, 2017-2021, km

Table 6. Structure of imports of power cables by importing countries in 2017, in 2021

Table 7. Data on completed tenders for the purchase of power cables with a contract amount of more than 120 million Rs., 2020–July 2022

Table 8. Average producer prices in the power cable market by Union Territories, 2019-Jun. 2022, Rs./km

Table 9. Average consumer prices in the power cable market by state in India, Aug. 2022, Rs./m

Table 10. Assessment of factors of investment attractiveness of the power cable market

Table 11. Forecast indicators of the development of the Indian economy

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