Enablence, SUNSEA joint venture targets Chinese broadband component market

DECEMBER 14, 2010 -- Enablence Technologies Inc. (TSX-V: ENA) says it will enter a joint venture with China’s SUNSEA Telecommunications Co. Ltd. to position Enablence’s Optical Components and Subsystems Division to capitalize on opportunities in the Chinese market for broadband telecommunications equipment.

The joint venture, to be called Sunsea-Enablence Optoelectronics, will be established in Foshan, China, with operations expected to commence July 2011 subject to regulatory approvals in China. Its initial focus will be on producing components for fiber to the home (FTTH) applications based on Enablence’s proprietary planar lightwave circuit (PLC) platform in high volumes. Its product lines will further expand into PLC-based modules and transceivers and in areas other than FTTH.

SUNSEA is a developer and manufacturer of physical telecommunications network equipment in the Chinese market. It has also built a supply chain that includes global equipment vendors active in a variety of established and emerging markets.

Sunsea-Enablence Optoelectronics will be created with an initial capital investment of $18 million, of which Enablence will contribute $3.5 million in cash and $1 million in equipment, as well as its expertise in developing and manufacturing optical components based on its PLC technology. Enablence will hold a 49-percent ownership stake in the joint venture (all figures in U.S. dollars).

In the first year of operation (expected to be July 2011 through to June 2012) Enablence and SUNSEA expect the joint venture to generate revenues of approximately $8 million to $10 million. This is expected to rise to approximately $15 million to $20 million in the second year of operation. The partners expect the venture to be profitable and accretive to earnings within the first year.

“The Chinese market is still in the initial stages of a growth curve for broadband access equipment that is staggering,” said Wensheng Wang, chairman and CEO of SUNSEA . “And yet, until now, China’s domestic telecommunications companies have had to rely on foreign suppliers for advanced next-generation PLC-based components. We welcome the opportunity to work with Enablence and integrate its innovative optical solutions into our product lines.”

“While Enablence already has valued partnerships with leading technology vendors in China, this is our first joint venture in one of Asia-Pacific’s fastest growing telecommunications market,” said Tim Thorsteinson, CEO of Enablence. “SUNSEA has an established supply chain, not just in China, but with other global vendors targeting other markets, into which they can introduce our PLC-based components. We look forward to a long and profitable relationship.”

Visit SUNSEA Telecommunications

Visit Enablence Technologies