Filcon Electronics Pvt Ltd is one of the leading manufacturers of plastic film capacitors in the country today. The company supplies capacitors to several electronics and telecom majors, including ITI, BEL and BHEL. indiamarkets spoke to Arvind Rao of Filcon on the business imperatives of the day, and the company's outlook for the future.

indiamarkets: Could you tell us about Filcon's range of products, and their applications?
Arvind Rao: We manufacture plastic film capacitors, in three broad categories: metallised polyester, metallised polypropylene, and metallised polystyrene. Our major buyers are from the telecom sector, since our products find application at practically every point down the line, from a telephone instrument, to exchanges and transmission equipment. Our plastic film capacitors also go into electronic safety and defence equipment. Filcon's  clientele includes leading players in the telecom and electronics sectors, such as ITI, HTL, BEL, Puncom, Bharti Telecom, UTL, Crompton Greaves and ABB. We enjoy considerable goodwill in the industry, thanks to our well-established relationships with various Original Equipment Manufacturers.

indiamarkets: Electronics is generally thought of as being "hi-tech". Is yours a high technology area, characterised by frequent product innovations?
Arvind Rao: On the contrary, the market that we address is fairly low-tech. Going forward, we are considering moving into other segments, up the technology ladder, such as lighting and ballast.

indiamarkets: Filcon has been in the capacitors business for two decades now. How has the industry evolved over this period?
Arvind Rao: It has been getting increasingly difficult to generate profits in this business. There is a real threat due to dumping by Chinese manufacturers. Perhaps this is on account of severe over-capacity in China. Whatever the reason, the competition from imported goods has considerably intensified. On the raw material front, the import duty on plastic film, the key input in the manufacturing process which we import from Germany and Korea, remains high at 25 per cent. So there isn't much scope for flexibility on the input cost front.

indiamarkets: Given this scenario, what strategy do you think Indian manufacturers need to adopt?
Arvind Rao: Having highly automated plants with large volumes is the only viable strategy in the long run. This is what we are aiming for at Filcon. We have made significant capital investments towards this end in the last one year. We plan to build our capacity in phases, and grow twentyfold in the next few years. This will enable us to deliver high volume requirements on trying time schedules, while retaining the flexibility to provide short-run need-specific product development and production. This, we feel, is the only way to be globally competitive.

indiamarkets: How has the advent of the Internet affected business at Filcon?
Arvind Rao: E-mail has made a big difference to business communication. The widespread use of e-mail has significantly brought down communication costs, with fewer STD calls being made. This apart, the Internet hasn't really made a big difference to our business. We are not really into e-commerce - I feel it is not very applicable in an industry such as ours where we have established relationships with a few OEM customers.