HFCL an Indian telecom gear maker has revealed a growth initiative in Europe with the setting up of an optical fibre cable manufacturing plant in Poland.
In a release, HFCL said the new expansion marks a milestone in the company’s global expansion strategy, directed towards the increasing demand for OFC in European markets such as Germany, Belgium, the UK, France, Poland, etc.
Specifics of Manufacturing Plant in Poland.
HFCL’s manufacturing plant in Poland will begin with a capacity of 3.25 million fibre km and expand up to 7 million fibre km with an initial capacity outlay of up to Rs 144 crore, thus fulfilling the surge in OFC demand.
This tactical maneuver will not only enhance HFCL’s agility but also reduce commuting times by approximately six weeks, thereby enabling a surge in order fulfillment capacity,” it said.
The setup of a new manufacturing unit in Poland will be facilitated through the assimilation of a new step-down subsidiary in Poland under HFCL B.V. a wholly-owned subsidiary in the Netherlands.
To capture market opportunities and strengthen its position in the OFC field, HCFL intends to ramp up the share of exports in its OFC vertical revenue from the current 30% to 70% in the next 4-5 years.
Europe’s OFC Market
The release said, Europe with its, favorable growth potential, particularly stands out as a focal point for HFCL’s strategic initiatives.
Europe’s OFC market is expected to undergo a compound annual growth rate (CAGR) of around 4.5% over the next 5 years with expected demand of 90 million fibre km per annum by 2028.
The FTTH Council projects around 308 million homes in the European Region to have FTTH connectivity by 2028, speeding up implementation by 3-5 years.
This signals a swift growth of FTTH networks in the areas that will lead to increased demand of OFC.” it said.
Elements such as bandwidth limitations of traditional cable and copper networks, regulatory imperatives driving fibre implementation, and increasing traffic demands underscore the critical need for full fibre solutions.
Current global political events and regulatory shifts like the possible imposition of anti-dumping duties emphasize the necessity for localized manufacturing to mitigate risks and ensure smoothly enhanced access to target markets.
HFCL’s Footprint in the European Market
HFCL’s decision to set up a manufacturing footprint in Europe matches seamlessly with this imperative, protecting from potential regulatory shifts and enhancing competitiveness in the region.
The proposed extension will enable HFCL to enjoy a significant increase in purchases by prevalent customers”, the company said.
Poland has emerged as an esteemed choice European nation, primarily due to its appealing market access to other European nations for incentive programs and cost competitiveness, it said.
The presence of niche skills at relatively lower labor costs than other European nations further enhances its attractiveness of setting itself up as a leading location for manufacturing.
About HFCL
HFCL Limited is an Indian technology company based in Gurgaon. Its main domain specialization is designing, developing, and manufacturing telecommunication equipment, and fibre optic cables.
HFCL’s share price is Rs. 113.40 per share. HFCL is listed in both the National Stock Exchange and the Bombay Stock Exchange.