HFCL Expands Globally: Sets Up Optical Fibre Cable Plant in Poland to Meet European Demand

22 Feb 2024 , 02:18 PM

Indian telecom gear manufacturer HFCL is strategically expanding into Europe by establishing an optical fibre cable manufacturing plant in Poland.

The expansion aims to address the growing demand for optical fibre cables (OFC) in European markets, including the UK, Germany, Belgium, France, and Poland.

The manufacturing unit in Poland will start with a capacity of 3.25 million fibre km (fkm) and can scale up to 7 million fkm. The initial capital outlay for this venture is expected to be up to ₹144 Crore.

This move is a crucial milestone in HFCL’s global expansion strategy, enhancing agility, reducing transit times by approximately six weeks, and increasing order fulfilment capacity.

The establishment of the manufacturing facility in Poland will be facilitated through the incorporation of a new stepdown subsidiary under HFCL B.V., a wholly-owned subsidiary in the Netherlands.

HFCL aims to ramp up the share of exports in its OFC vertical revenue from the current 30% to 70% over the next 4-5 years.

Europe, with promising growth prospects, particularly stands out as a focal point for HFCL’s strategic initiatives. The OFC market in Europe is projected to experience a compound annual growth rate (CAGR) of around 4.5% over the next five years, with an expected demand of 90 million fkm per annum by 2028.

Recent geopolitical developments and regulatory shifts underscore the necessity for localised manufacturing to mitigate risks and ensure enhanced access to target markets.

HFCL’s decision to establish a manufacturing footprint in Europe aligns with this imperative, safeguarding against potential regulatory shifts and enhancing competitiveness in the region.

Poland is chosen as the manufacturing destination due to its attractive market access, incentive programs, cost competitiveness, strong connectivity to other European nations, well-developed ports, and the availability of specialized skills at a relatively lower labor cost compared to other European nations.

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