Wang Jianyi, founder and chairman of Zhejiang-based Futong Group, chairman of China's optical fiber maker Futong Group, has joined FORBES' billionaire ranks with a net worth of $1 billion, thanks to the company's strong business performance.
Analysts said that Futong achieved a breakthrough in the manufacturing of optical fiber preform, the core raw material for optical fiber production, and is the first enterprise in China that can make this material with the latest all-synthesis technology. This technological advancement has helped Futong increase its production capacity of optic fiber preforms to 600 tons a year. Annual output of optical fibers and optic fiber cables also grew to 25 million kilometers and 15 million kilometers respectively. According to a recent bond rating report by Beijing-based Dagong Global Credit Rating Company, revenue of the company climbed 45% in 2011 to $1.4 billion (8.73 billion yuan). For first-half 2012, it increased 13.2% to $690 million (4.3 billion yuan). Net income in first-half 2012 also grew 30.5% to $37.5 million (233.4 million yuan). Wang owns 80% of the company, which is private.
Li Fei, analyst for Dagong Global Credit Rating Company and author of the bond rating report, told FORBES that optical fiber preform is the upstream product of the optical fiber industry and requires high technical content in its manufacturing techniques.
With more than 45% of the world's total demand, China is the largest consumer of fiber optics in the world. But most Chinese optical fiber and cable manufacturers rely upon importing optical fiber preforms from overseas suppliers in Japan, Europe and the U.S., including Fujikura, Sumitomo Electric, Corning and Holland Drake.
Wang Jianyi, who founded a small workshop manufacturing electric cables in 1987, sensed the opportunity in the Chinese optical fibers market in 1993 and formed joint ventures in China with Sumitomo Electric Industries, one of the world's leading wire and cable makers. By 2010, Futong controlled 23% of the Chinese optic fiber market. Now it is a major supplier to China's largest telecommunication service providers, including China Mobile, China Unicom, and China Telecom, and exports its cables to overseas markets such as Japan, Germany, and Russia.
Li expects that booming demand in China will bring opportunities to major fiber cable makers like Futong. One of the key factors contributing to the market growth is the increasing government investment in fiber optic broadband network construction. Continual FTTx and 3G roll-outs and the supporting optical network are part of the government's long term view for a globally competitive telecommunications infrastructure. The market has also been witnessing the increasing demand for customized fiber optic patch cords.
However, increased competition and overcapacity may pose challenges for fiber cable makers. Key vendors dominating the market space in China are Yangtze Optical Fiber and Cable Co., Hengtong Group Co., Jiangsu Zhongtian Technology Co., Fiberhome Telecommunication Technologies Co., and Zhongli Science and Technology Group Co. Among them, Hengtong Optic-electric also set up a joint venture with Furakawa Electric in 2010 to manufacture and distribute optical fiber preforms in China.
A Futong Group spokeswoman in Hong Kong has not responded to several requests for comment from FORBES.
Note: The yuan-denominated net income in first-half 2012 has been updated to 233.4 million yuan in the parenthesis due to an input mistake.
Forbes |
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