HFCL Ltd.'s board has approved the company's expansion into Europe, which includes establishing an optical fiber cable manufacturing facility in Poland.
The planned investment for this facility is around ₹144 crore, aiming for an initial production capacity of 3.25 million fiber kilometers (MFkm) per annum, with potential expansion to 7 MFkm per annum.
For this purpose, HFCL will create a new stepdown subsidiary under HFCL B.V., its wholly-owned subsidiary in the Netherlands.
The facility is expected to start by February 2025, with the investment being financed through debt and internal accruals. This initiative is intended to meet the growing demand for optical fiber cables in European markets such as Germany, Belgium, France, and Poland.
HFCL's goal is to increase its export revenue in the Optical Fiber Cable (OFC) segment to 70% over the next four to five years, from the current 30%.
The FTTH Council projects that the OFC market in Europe will grow at a Compounded Annual Growth Rate (CAGR) of 4.5% over the next five years, reaching a demand of 90 million fkm per annum by 2028.
This expansion is expected to reduce transit times by up to six weeks, which could improve the company's order fulfillment capacity.
Mahendra Nahata, Managing Director, HFCL, said, “With Europe expected to remain a key market for optical fiber cable led communication, our foray into Poland not only ensures unfettered access to this growing European market but also helps improve the agility and responsiveness in catering to increasing optical fiber cable demands of our customers.”
“With this strategic expansion, we are poised to align with Europe's vision, which anticipates gigabit connectivity as a cornerstone of its future. Our commitment to Europe's digital future is based on the unique approach of superior quality, customised solutions and innovative solutions in fastest turnaround time,” he added.
