SEI and Nanjing Putian Agree in Optical Networking Equipment JV

Sumitomo Electric Industries (SEI) announced on Thursday the firm signed a joint venture agreement with Nanjing Putian Telecommunications, Chinese major maker of telecommunication wires and components. They establish a fifty-fifty joint venture company in Nanjing City, Jiangsu Province, China to produce optical networking equipments used in Chinese FTTx (Fiber-to-the-x) market. The production will start in August 2010. The JV’s annual revenue is targeted at approximately 500 million yuan (approximately 6.7 billion yen) in 2014.

FTTx is telecom service to connect telecom carriers and residents or buildings directly by optical fiber cables. In China, broadband network users are rapidly increasing and FTTx market is expected to expand in 2011, sooner or later.

The JV is established with US$ 4 million (approximately 360 million yen) of capital fund, fifty-fifty invested by SEI and Nanjing Putian. The capital is planned to be increased to US$ 10 million in or after 2011. The JV leases Nanjing Putian’s existent plant.

The JV supplies optical networking equipments to Chinese domestic market. SEI has produced optical networking components at another subsidiary in Wuxi City, Jiangsu but the subsidiary has supplied the products out of China. For Chinese domestic market, SEI has exported optical networking equipments from Japan.

Nanjing Putian holds the top share of about 25% in Chinese telecom wire and component market. The JV aims to become the top supplier of optical networking equipments in the country by utilization of SEI’s high technology and Nanjing Putian’s sales power against Chinese telecom carriers.