India’s hiked capex expected to boost wire and cable industry
Overview: The Union budget 2022-23 has pegged India’s GDP growth at 9.2 per cent, highest among all major economies around the world, with special focus on infrastructure expansion in Financial Year (FY)-23. For FY23, Union Finance Minister Nirmala Sitharaman stepped up capital expenditure sharply by 35.4 per cent to Rs 7.50 lakh crore in 2022-23 (2.9% of GDP) against Rs 5.54 lakh crore in the current year. A go ahead to 100 PM Gati Shakti cargo terminals, 25,000 Km of highway projects for FY2023 and 400 new generation Vande Bharat trains and similar provisions are likely to help many stocks in the long run, particularly the infrastructure sector.
A SEBI registered RIA, Ashis Sarangi of Pickright Technologies, said the budget appears to benefit infrastructure, banking, power and metal industries. He said the infrastructure industry, together with ancillary industries such as metal, real estate, and cement, would be sectors to benefit the most with Rs 7.5 lakh crore allocation.
The global wire and cable compounds market size is projected to grow from USD 12.5 billion in 2021 to USD 19.2 billion by 2026, at a CAGR of 9.0 per cent between 2021 and 2026.
Wire and cable compounds are specialty application materials used to formulate insulating and jacketing materials for wires and cables. The compounds are also used in manufacturing semi-conductive shields for cables. These compounds offer enhanced quality and better performance which include new standards for safety, sustainability, and reliability as they provide high insulation properties. These wire and cable materials are used in the construction, power, communication, and automotive industries. Wire and cable compounds have a major role in coating wires and cables as they provide safety insulation to the conducting wires
According to various reports, halogenated polymers are expected to register the highest CAGR in terms of value between 2021 and 2026. Halogenated polymers include polyvinyl chloride (PVC) and chlorinated polyethylene (CPE) which are widely used in various industries such as wire and cable, footwear, plastics, and packaging. However, PVC has usage in a wider range of applications than CPE.
The APAC region is projected to register the highest CAGR in terms of value in the global wire and cable compounds market during the forecast period. In 2020 the APAC countries dominated the wire and cable compounds industry. The Asia Pacific region is estimated to be the fastest-growing market for wire and cable compounds owing to economic growth in emerging countries and a strong foothold in the developed countries in the market. The demand generated for wire and cable compounds from emerging countries is attributed to increased industrialization and urbanization. The demand generated from developed countries is primarily driven by the increased household spending due to the rapidly expanding middle class and rising disposable incomes.
Due to COVID-19, wire and cable compounds producers and numerous companies have halted their production sites across various countries that has led to reduced demand for wire and cable compounds, APAC countries. The recovery in the end-use industries with restoration in the supply chain would drive the wire and cable compounds demand during the forecast period.
These wire and cable compounds offer enhanced quality and performance standards which include new standards for safety, sustainability, and reliability as they provide high insulation properties. These wire and cable compounds are used in the construction, power, communication, and automotive industries. Wire and cable compounds have a major role in coating wires and cables as they provide safety insulation to the conducting wires.
As mentioned earlier, halogenated polymers by type are the fastest-growing wire and cable compounds type of wire and cable compounds market in terms of value. Halogenated polymers are projected to register the highest CAGR in terms of value between 2021 and 2026.
Construction is the fastest-growing end-use industry of wire and cable compounds market, in terms of value. Construction is the largest and is projected to be the fastest-growing end-use industry of wire and cable compounds during the period of a recent survey. In the construction industry, wire and cable compounds are used for commercial, residential, and industrial purposes for power transmission and low- and medium-voltage cable applications.
Incidentally, the Asia Pacific region is projected to be the fastest-growing market for wire and cable compounds owing to economic growth in emerging economies and a strong foothold in the markets of the developed countries. The demand generated for wire and cable compounds in the emerging economies is attributed to the rapid industrialisation and urbanization.
The recovery in the end-use industries with restoration in the supply chain would drive the wire and cable compounds demand during the period of2021 to 2026. India expects to have a robust cable and wire industry after the huge jump in its capex allocation in its Union budget for the next financial year.
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Arijit Nag is a freelance journalist who writes on various aspects of the economy and current affairs.
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