Wire and cable sector basically consists of two areas: power and telecommunication.
Powers cable essentially use PVC while telecommunication sector uses PE. Power cable consists of 3 types of products depending upon the intensity of power. Low-tension sector requires cables up to 1.1 KV and predominantly uses PVC insulation and jacketing. The medium tension power cable between 1.1 KV and 11 KV use PE as well as PVC. The high-tension sector is beyond 11 KV. This sector uses exclusively PE.
The low-tension cables are used for tertiary distribution of power mainly from substation to buildings. It also includes housing wires. This sector contains many other products for myriad applications.
The medium tension cable generally use silane croslinkable PE compounds while the high-tension cables use continuous vulcanization cables made from PE (LDPE).
The telecommunication cables are essentially made from PE because of excellent insulation characteristics.

Compound requirements in 2004 :

There are about 25 large cable manufacturers in India who predominantly manufacture their own compounds (both PVC and PE). Only smaller cable manufacturers buy compounds from compounders.
The attached exhibit describes the PVC consumption in 2004 along with its applications. It clearly indicates that only about 200 KT of compound is purchased from merchant compounders out of the total requirement of almost 1300 KT. Cable and footwear applications both uses about 65 KT each of the compounds from the independent compounders
These two applications are plasticized PVC products. They require substantial amount of additives. Essentially about 7 different additives would be required. The mixing of these additives is a different process compared to that used for typical thermoplastic compounds.

PVC plasticized compound can be manufactured on single screw extrusion system, but intensive mixers as well as twin screw extrusion system are preferred. PE compounds grades for continuous vulcanization require very pure LDPE polymer that is produced by only 2 manufacturers. They prefer to make the compounds instead of marketing the polymers to other clients. Out of the 50 KT PE compounds required by the Indian cable industry, 15 KT is required for continuous vulcanization process. That leaves only 35 KT of PE compound. In power cable 50% of the compounds used for jacketing is low value added products and hence very low margins. Small compounders manufacture this type of compound. It would be difficult to compete with these compounders.

The silane grafted PE compounds used in low-tension cable sector are high value added products. The volume of this type of compound in 2004 was around 15 KT. However it requires separate type of compounding facility. One important point is that these compounds require separation form other types of compounds to prevent cross contamination. In other words the same equipment can not be used to manufacture other types of compounds ore masterbatches.

To summarize, wire & cable compounding provides some opportunity in silane grafted PE compounds in the present market of about 15 KT/Year. PVC compounding will require different set up and will involve capital expenditure for equipment to the tune of about Rs. 50 million for 5000 MT/ Year capacity.