SEI Establishes Optical Fiber and Cable JVs with Futong in China

Sumitomo Electric Industries (SEI) announced on 16 October the firm establishes the new 3 joint ventures to produce optical fibers and cables in China. The firm concluded a JV contract with Futong Group, Chinese major producer of optical fibers and cables, on 16 October. The 3 JVs includes a manufacturing company of optical fiber preform. SEI aims to enhance its presence in Chinese optical fiber and cable market. Futong Group has targeted to start optical fiber preform production, to expand the optical fiber and cable sales in West and South China, and to reinforce the export business. They will meet these interests by establishment of the new 3 JVs.

Hangzhou SEI-Futong Optical Fiber will start optical fiber and preform production in September 2010, located in Hangzhou City of Zhejiang Province. The JV is controlled by SEI with 51% shares and Futong Group with 49% shares. The annual revenue target is 3.5 billion yen for 2011. This is the first case that Japanese electric cable maker starts optical fiber preform output in China.

Chengdu SEI-Futong Optical Cable in Sichuan Province manufactures optical fibers into optical cables. The JV will start commercial output in January 2009 and aim 6.2 billion yen revenue for 2010. Futong Group holds 51% shares and SEI 49% in the JV. The JV will cover the demand growth for optical cables in West China.

The other JV, Hong Kong SEI-Futong Holding, is a holding company, 49% owned by SEI and 51% by Futong Group. The holding company finances SEI’s and Futong’s existing 2 subsidiaries those which produce optical fibers and cables. One is SEI Optical Fiber & Cable (Shenzhen), 100% owned by SEI, and the other is Transtech Optical Communications.

Hong Kong SEI-Futong Holding strengthens support for major customers in Guangdong Province while expands export business by utilizing the locational advantage, close to Southeast Asia.