HFCL Breaks Ground on Optical Fibre Plant with an Investment of $38 Million

Himachal Futuristic Communication Ltd. breaks ground on optical fibre plant near Hyderabad with an investment of nearly $38 million. The optical fibre plant is likely to be one of the few in India making principal raw material for optical cables and is anticipated to begin production in April 2019.

Group chairman, Mahendra Nahata stated that this is the first facility of HFCL, which is likely to manufacture 6.4 million kilometres per annum. However, the company will increase its production capacity to 8 million fibre by the end of April 2018, with an additional investment of approximately $7.7 million. The company’s own demand for optical fibre is 15 million fibre km. The new optical fibre plant will reduce raw material expenditure by 25-30% and will enhance profitability of HFCL.

$ 107 Million Investment in the Pipeline

Further, Mr. Nahata stated that HFCL would consider doubling the production capacity over the time and step into manufacturing of preform, a further backward injection project. To increase production capacity, company will be required to invest almost $107 million more. According to the chairman, the demand for optical fibre in India is over 40 million fibre kilometer. Though production capacity can manufacture nearly 40-50 million fibre km, a lot of optical fibre gets exported. Thereby, demand for optical fibre in India still continues to increase.

4G and 5G Network Technology Demanding more for Optical Fibre

Over next five years, the data traffic is likely to be triple due to higher number of connected devices, surging data consumption per unit, rising video consumption, led by higher data speeds. While mobile networks are compel by spectrum availability and coverage issue, optical fibre has less limitations. Thereby, massive demand for data has resulted in increased demand for optical fibres. Earlier, telecom companies would prefer wireless, whereas optical fibre and cable operators companies took immobile broadband to home; now silos are being broken. Telecom companies are looking forwards for optical fibre so as to increase their consumer base and can own consumers end-to-end. India is importing nearly 10-15 million optical fibre km. 4G and 5G network technology is continuously demanding more for optical fibre, while other factors such as FTTH, increasing data centers as well as BharatNet project of the government are other factors trigger growth of optical fibres in India.

HFCL Seeking for Local Talent

Further, HFCL is planning to increase defense equipment manufacturing capacity, following its contribution in the RFP for providing mini UAVs as well as night vision gadgets to Indian Army. Through the Telangana Academy for Skill and Knowledge the state government will train local youth to become eligible for jobs, urging HFCL to prefer local talent. Mr. stated that the State is likely to be kept on supporting in its development procedures, highlighting Telangana ranked first in the Ease of Doing Business Index. The minister further added the state was executing a project to join large number of homes through a high-speed broadband connection by the end of 2018.

Summary: HFCL to save 25-30% on raw material expenditure by optical fibre plant. HPCL launches new manufacturing plant for optical fibers, which is aimed to capture the steady demand for optical fibers in India.

Sudip Saha

Sudip Saha is one of the leading tech consultants in APAC, having served at key positions in leading IT consulting firms. He has extensively written about the commercial viability and impact of next-generation technologies, most notably AI, IoT, and Big Data. Sudip’s forte lies in offering a nuanced analysis on the key developments in the tech landscape. A reputed thought-leader, his views have been published in leading publications, including CIO, ZD Net, Economic Times, and The Economist