Rank 7: Sterlite Optical Technologies: In Big League, but...

Sterlite Optical Technologies’ (SOTL) consolidated sales (including those

of 100 percent subsidiaries) in the fiscal 2001-02 aggregated to Rs 954.9 crore,

as compared to the previous fiscal’s turnover of Rs 763.8 crore, thereby

registering a growth of 25 percent. The net profit after tax aggregated to Rs

131.9 crore as compared to Rs 255.8 crore in 2000-01.

The overall sales volume of optical fiber increased by 23 percent, while the

sales volume of optical fiber cables increased by 13 percent, in spite of the

difficult market conditions. Copper telecommunication cables sales volume

declined by 6 percent.

SOTL continues to be the largest player in optical fiber space, with a market

share of 65 percent. The company holds a market share of 50 percent in the OFC

space and 18 percent in the copper telecommunication cables space. It must be

kept in mind that average realizations of optical fiber declined substantially

by 39 percent as compared to the previous year, while optical fiber cable

declined by 8 percent. In copper telecommunication cables, the realization drop

was 26 percent over the previous year. The decline in export markets was more

pronounced wherein OFCs have plunged from a level of around $80 per km in the FY

2000-01 to around $20 in FY 2001-02. This sharp decline in realizations has had

an adverse impact on the overall sales and margins of the company.

The severely depressed international market conditions have also taken their

toll on the company’s export volume and realizations. The exports of optical

fiber and optical fiber cables netted only Rs 60.3 crore as compared to Rs 277.7

crore in the first nine months of the fiscal 2000-01, indicating a decline of 84

percent. It may be recalled that in FY 2001, SOTL had exported more than 70

percent of its production of optical fiber and optic fiber cables to the US,

Europe and other developed economies.

SOTL’s optical fiber capacity expansion of 4 million km was also completed

during this period and is in the process of stabilization. The capacity

augmentation to 5 million km is underway and is expected to be completed in the

current year.

Sterlite Optical Technologies TURNOVER FACTSHEET Group Chairman : Anil Agarwal CEO : L Ramkumar Area of Operation : Optical fiber, optical fiber cables and JFTC No of Employees : 1,100  Address : E-2, MIDC Industrial Area, Waluj Aurangabad 431136  Tel : 0240-564599 Fax : 0240-564598 Web site : www.sterliteoptical.com  S W O T Strength  Large marketshare and huge installed capacity Weakness Dependence on overseas market which made a dent on its topline Opportunity Growth in OFC business Threat  Glut in industry

The company has obtained Telcordia certification for its optical fiber and

cables as well its plant and systems. SOTL was also permitted self-certification

of approved products by BSNL, under the Approved Inspection Scheme (AIS). It is

the first and only manufacturing facility to get an AIS certification. The

company has recently launched dispersion optimized fiber meant for DWDM

applications and premium grade multimode optical fiber suitable for high-end

gigabit Ethernet applications.

With major orders in its kitty from the likes of Reliance, SOTL plans to

focus on costs and improved operational efficiencies in the coming year. Its

primary focus for the current year would be on expeditious stabilization of

installed capacities. Sterlite has established a technology development team

headquartered at Atlanta, and supported by an application center in India to

meet world-class standards in fiber manufacturing. SOTL also plans to focus on

costs and improved operational efficiencies.