Sterlite Optical looks outward for growth

Sterlite Optical Technologies, a producer of optic fibre cables (OFC), is looking at overseas markets and new product streams to shore up revenues.

The company has been hard hit by a lack of demand and depressed prices in the sector.

Sterlite Optical is part of the Sterlite Industries group. It is looking at grabbing a 12 per cent share in the OFC market in China, which is the only place outside India where the company has a full-fledged office set up, staffed by the Chinese.

This office was set up two years back and the company's share in the Chinese market is close to seven per cent, said Anand Agarwal, the chief executive officer and director of the company.

The demand for all OFCs in China is more than 11 million km. In the last fiscal, this demand has increased by close to 21 per cent. In India, the demand for OFCs is currently at 1.3 million km.

In the last fiscal the demand had slipped by 16.7 per cent. The installed capacity of Sterlite is five million km. Agarwal said the new markets being tapped are in Libya, Tunisia, Ethiopia and countries of Eastern Europe.

In all these places the company plans to have either a direct sales model or an outsourcing model where it would be tying up with large European integrators, who already have a presence in these countries.

While OFC prices have stabilised at $12 per km, the company is also planning to get into new product areas. Data cables (ethernet) is one of the areas where Agarwal sees a lot of potential with an expected explosion in broadband connectivity, multimode fibres as well as export of copper cables.

At present the company's operations in India account for around 80 to 85 per cent of its revenues while its overseas activities bring in the remaining. Agarwal said it is the company's intention to increase the share of the revenues from outside India. Its order book at present is worth Rs 100 crore, over the next three months.