Updated February 21st, 2024 at 16:30 IST

HFCL to expand European operations with new plant in Poland

The decision to set up operations in Poland is part of HFCL's broader strategy to capitalise on the burgeoning demand for OFC in European markets.

Reported by: Business Desk
HFCL | Image:HFCL Limited
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HFCL has announced its strategic foray into the European market with the establishment of a cutting-edge Optical Fiber Cable (OFC) manufacturing plant in Poland. The move underscores HFCL's commitment to global expansion and signifies a major milestone in its growth trajectory.

The decision to set up operations in Poland is part of HFCL's broader strategy to capitalise on the burgeoning demand for OFC in European markets, including the UK, Germany, Belgium, France, and Poland. With a vision to increase the share of exports in its OFC vertical revenue from 30% to 70% within the next 4-5 years, HFCL aims to leverage Europe's promising growth prospects to strengthen its position as a key player in the industry.

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Europe's OFC market is poised for substantial growth, with a projected compound annual growth rate (CAGR) of 4.5% over the next five years. Factors such as the accelerated deployment of Fiber-to-the-Home (FTTH) networks and escalating bandwidth demands are driving the demand for OFC in the region. In light of regulatory imperatives and geopolitical developments, localized manufacturing has become imperative to mitigate risks and ensure seamless market access.

Poland emerges as the preferred destination for HFCL's manufacturing expansion, offering attractive market access to other European nations, cost competitiveness, and well-developed connectivity infrastructure. The availability of specialised skills at competitive labour costs further enhances Poland's appeal as a premier manufacturing hub in Europe.

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HFCL's plant in Poland will initially have a capacity of 3.25 million fiber-kilometers (fkm), scalable up to 7 million fkm. With an initial capital outlay of approximately INR 144 Crores, the facility is poised to meet the growing demand for OFC in the region. The establishment of this manufacturing facility will not only enhance HFCL's operational agility but also reduce transit times, thereby enhancing order fulfilment capacity.

The incorporation of a new step-down subsidiary in Poland under HFCL B.V., a wholly-owned subsidiary of the company in the Netherlands, will facilitate the establishment of the manufacturing facility.

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HFCL shares ended 1.4 per cent higher at Rs 112.30. Earlier in the day, the stock rose as much as 4.46 per cent to hit fresh 52-week high of Rs 115.70 on the BSE.

 

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Published February 21st, 2024 at 16:09 IST