By Mardi Balgochian Scalise
While a subsidiary of Corning announces acquisition of half of the shares in a South African optical cable company, the company adjusts optical fiber manufacturing expansion plans.
Corning Incorporated (NYSE:GLW) announced that its wholly owned subsidiary, Corning International Corporation, has entered an agreement to acquire 50 percent of Aberdare Fiber Optic Cables, a South African manufacturer of optical fiber cable for the sub-Saharan telecommunications market. Corning Cable Systems, Corning Incorporated's cable division based in Hickory, N.C., USA, will manage Corning's interest in the equity company. The transaction will be completed in two stages over the next two years.
Corning Cable Systems will appoint Aberdare Fibre Optic Cable's marketing and commercial executive, while Aberdare Cables (Pty) Ltd., the other equity owner, will appoint the chief executive officer. Corning will continue to supply 100 percent of the venture's fiber requirements. Other terms of the shareholders' agreement were not disclosed.
Aberdare Cables Ltd., a wholly owned subsidiary of Johannesburg Security Exchange-listed Power Technologies (Pty) Limited, was founded in 1947 as a power cable manufacturer. Its subsidiary, Aberdare Fibre Optic Cables, has a history dating back to 1985 when the company started manufacturing fiber optic cables. Today it provides a full optical cable product line including duct and direct-buried cable, aerial cable and tight-buffered cable for premises network applications. Aberdare Fibre Optic Cables employs 200 people and is based in Port Elizabeth, South Africa.
In the U.S., Corning Incorporated (NYSE:GLW) announced it is delaying the construction schedule of its previously announced Oklahoma City, Oklahoma optical fiber manufacturing facility. In addition, Corning is slowing the rate of expansion to its Concord, North Carolina plant. The company said the adjustments are necessary to pace its growth in manufacturing capacity and rate of capital spending with current market conditions. These announcements are expected to impact overall fiber manufacturing capacity growth beginning in 2002.
Corning will delay the Oklahoma City construction project by approximately 12-18 months. This would move the expected date for initial production to late 2004 or early 2005. The company will begin to realize additional capacity in Concord in the first half of 2002, with the ramp to full production paced to market conditions.
About Corning Incorporated:
Established in 1851, Corning Incorporated manufactures optical fiber, cable and photonic products for the telecommunications industry; and high-performance displays and components for television and other communications-related industries. For more information, visit www.corning.com.
About Aberdare Cables Ltd.
Aberdare Cables manufactures and distributes low, medium and high voltage power cable, copper and fiber-optic telecommunication cable, industrial and instrumentation cable, data cable, allied plastic components and associated accessories. For more information, visit www.aberdare.co.za, www.powertech.co.za, and www.altron.co.za.