Sterlite tech says manufacturing capacities now close to pre-Covid levels

Data network solutions provider Sterlite Technologies' manufacturing capacities have revved up to near pre-coronavirus pandemic levels, said Group CEO Anand Agarwal, according to a news report by the Press Trust of India.

Agarwal said government spending on digital infrastructure needs to go up significantly in tandem with other economies of similar size, and that digital networks need to be seen more as enablers for healthcare, education, smart cities, business, and governance.

"Consider our spending on roads and railways, power, ports, and how we spend on infrastructure for critical movement of goods. Now, there is digital infrastructure on which information pertaining to healthcare, education, governance, business, is flowing...So, government investments into the digital infrastructure have to be viewed in the context of spurring GDP (gross domestic product) growth," Agarwal told the news agency.

A shift in mindset has to happen with regard to differentiating between conventional telecom and futuristic digital networks, which will be the nerve centre for all economic activities.

"We are thinking licence fee, spectrum, adjusted gross revenue... but it's no longer just a telecom play, it is more digital," he said adding that digital cannot be thought of in the same manner as telecom, on the lines of revenue earning potential.

On the operations side, Sterlite Tech, which had running at 60-65 per cent of its global production capacity in early May, said manufacturing capacities are reaching near pre-coronavirus levels in terms of unit production.

After nearly 75 days of movement restrictions triggered by the coronavirus pandemic, the first phase of 'Unlock India' has now started with significant easing of nationwide curbs aimed at reopening businesses and fuelling India's economic engines.

"We are an integrated provider, we do manufacturing of products, and also have digital projects, software operations...for operations on the manufacturing side, we have come to almost pre-Covid-19 levels... We have 18 million km of capacity of optical fibre cables and 30 million km annual run-rate for optical fibres. We have almost reached that capacity," he said.

Asked if there is enough demand in the market to justify production at the current levels, Agarwal said there is an element of backlog that is being cleared. Also, the company has seen a "high level of interest" from global clients in strengthening their investments in digital infrastructure, he added.

Citing the global investments that have flowed into Indian telecom companies over the past few weeks, he said the shift to digital is "permanent".

Given the surge in data usage over the past few months, in the backdrop of global coronavirus pandemic and work-from-home culture, networks are constrained by the supply, and companies globally are looking at strengthening their infrastructure to meet rising demand from users, he said.

ALSO READ: Home furnishing units will recover faster than garments: CRISIL SME Trackerdata

With a portfolio ranging from optical fibre and cables, network design, and deployment and network software, Pune-based Sterlite Technologies positions itself as integrated solutions provider for global data networks, with optical preform, fibre and cable manufacturing facilities in India, Italy, China and Brazil.

The company, which designs and deploys high-capacity converged fibre and wireless networks, said it is taking all precautions to ensure safety of workers at its sites.

"We have looked at everything. For instance, there are people doing accounting work in factory... we are not calling those people. We are optimising and looking at whatever can be done from alternate infrastructure. Overall, we are calling significantly lesser number of people or calling people on alternate days, where required," he said.