Sumitomo Electric Industries Ltd. (SEI) has announced that it has begun construction on optical fiber and optical cable manufacturing plants in the city of Shenzhen in Guangdong Province, China.
Since the establishment in July 2001 of its optical fiber and cable production subsidiary, Sumitomo Electric Optical Fiber and Cable (Shenzhen) Co. Ltd. (SEFC), SEI has been applying to the Chinese government to increase the capital of this new company and was given approval in December.
SEFC will manufacture ordinary singlemode fibers as well as loose-tube cables that are widely used in China and other parts of the world. Most of the optical cable manufacturers in China are procuring preforms or fibers from other companies. Using the preform of parent company SEI, SEFC can take advantage of the technological consistency in SE's fiber and cable manufacturing. Optical cables manufactured by the new company will be sold to major Chinese telecommunications carriers such as China Telecom and China Unicom.
Working and coordinating closely with Chengdu SEI Optical Fiber Co. Ltd., an optical fiber production joint venture established in 1998, the new company will manufacture optical fibers using SEI's original VAD optical fiber fabrication method.
China Telecom and other telecommunications carriers are constructing inter-province trunk lines and intra-province trunk lines, while local telecommunication offices are constructing local networks. Information and telecommunications infrastructure is being actively developed and rolled out in the fields of cellular phones, CATV, and railways.
Against this backdrop of IT development centering around the Internet and cellular phones, demand for optical fibers and cables in China is forecast to surge 10 to 15 percent a year for the next several years, claims the company. Moreover, China will host the Olympic Games in the year 2008 and that is expected to lead to further construction of information and telecommunications infrastructure.
SEFC, which will become SEI's first optical cable production base in the China market, is scheduled to start production of optical cables in September 2002 and optical fibers in the beginning of 2003.