Universal Cables starts work on Rs 61-cr project

Birla Group company gets sops for technology upgrade

The company has obtained concessions and sops for this technology upgrade project to manufacture cross-linked polyethylene cables, which are commonly known as XLPE power cables.

MP Chief Minister Shivraj Singh Chauhan laid the foundation stone of the new unit and said the project would encourage other companies to invest in Madhya Pradesh.

According to a company source, vertical continuous vulcanisation (VCV) technology will be used for manufacturing XLPE cables in the country for the first time. UCL will complete the task in a phased manner at its existing Rs 120-crore Satna facility.

The first phase will take up the production of cables up to 132 Kv by December this year. In the second phase the company will manufacture cables for higher capacity in the 400 Kv range.

UCL had plans to arrange for Rs 47 crore as term loan and Rs 16 crore from internal accruals. The company had requested the state government to provide sops and concessions by considering the project a "mega category" one and award special importance since it involves modern technology and management. The state government offered it concessions and sops normally given any investment of Rs 25 crore, claiming that the proposed investment would gear up India for future needs of XLPE cables for and up to 220 KV and up to 400 Kv which are being imported at present.

The company had asked for industrial investment promotion subsidy (sales tax/value-added tax, including central sales tax, exemption in the form of subsidy) for 11 years on sales of furnished goods and waste and scrap produced during the process of manufacturing. It was also exempted from commercial tax and value-added tax on purchase of raw material and exemption from entry tax.

"We have offered them necessary concessions, which are available to any Rs-25 crore project, in accordance with the Industrial Promotion Policy. The plant and machinery will come in July and production is likely to start in December," Principal Secretary OP Rawat told Business Standard.

Cross-linked polyethylene cables are in demand to replace paper insulated cables.

"The company is expecting a good demand with high hopes from government to make the country a power hub on demand concept by 2012. The company, in its proposal, said it expected a Rs 29 crore profit within six years of the upgrade," another government official told Business Standard.

UCL also has a presence in cables, conductors and capacitors. At present it has a unit in Satna which manufactures, paper insulated lead sheathed (PILC) cables up to 33 kv, XLPE cables up to 145 kv, high temperature fluoro-plastic cables, winding wires and flat cables and PVC cables up to 11 kv etc.