Dutch firm Trafigura forms JV with Polycab to set up copper wire facility in India

The Dutch multinational commodity trading company Trafigura and Polycab Wires Pvt Ltd, one of India's largest wire and cable producers, have agreed to jointly set up a facility for manufacturing copper wire rod at Halol Gujarat. With a proposed total investment of $ 25 million (about Rs 167 crore), the manufacturing unit, which is expected to be operational by the end of 2017, will have an annual capacity of 240,000 metric tonnes.

This is the first base metal manufacturing investment for Trafigura for the Indian sub-continent and is aimed at addressing the rising domestic supply-demand gap in the copper wire rod market extensively used by the construction, power, transport and telecoms industries among others. This joint venture brings together Trafigura’s global expertise in metal trading and Polycab’s rich experience in the Indian copper wire rod market.

“Trafigura has been trading with Indian counterparts since inception. We established our first dedicated operating subsidiary in 2009, leveraging local and international knowledge to consistently understand and address the challenges in the country’s commodity and metals industry. We are committed to the Indian market and our new investment which fits with the flagship ‘Make in India’ programme of the Government of India,” said Jeremy Weir, CEO, Trafigura.

The technologically advanced facility will consume almost 30 percent less energy and produce significantly lower carbon emissions than existing facilities in India.

“In line with Polycab’s efforts to produce energy efficient products we will construct a technologically advanced copper rod mill which will save on energy consumption and significantly reduce carbon emissions,” commented Inder Jaisinghani, chairman and managing director, Polycab Wires Pvt Ltd.

The Indian copper wire rod market is currently estimated to be Rs 20,000 crore and is expected to grow 12 percent year-on-year. With increased public and infrastructure investment by the government the market is expected to witness a significant rise in demand in the foreseeable future.

“We see a great opportunity for managing our working capital and inventory management with this backward integration JV with Trafigura, our long standing partner. Polycab has predominantly served a domestic customer base and with the projected growth of the country our partnership with Trafigura strengthens Polycab’s resolve of providing high quality material at local costs. This partnership will ensure consistent and high quality copper rods for the increasing demands of the country,” continued Inder Jaisinghani.

Raoul Bajaj, CEO of Trafigura India, added, “We are extremely encouraged by our partnership with Polycab Wires. Not only has Polycab set up one of the leading wire manufacturing units in the world, they are growing the company capacity to meet domestic demand for the next ten years.”

Founded in 1993, the Trafigura Group has become one of the world’s leading independent commodity traders, specialising in the oil, minerals and metals markets. The company has achieved substantial growth in recent years, growing revenue to $ 97.2 billion in 2015.