Furukawa Electric Shifts Chinese Optical Cable Subsidiary into JV with Hengtong

Furukawa Electric announced on Tuesday the firm sells 49% shares in its wholly-owned subsidiary, Furukawa Electric (Xi’an) Optical Communication (below FXOC), to Chinese major telecom maker, Jiangsu Hengtong Photoelectric Stock (below Hengtong). FXOC produces optical telecom cable in Xian, China. Hengtong is Furukawa Electric’s JV partner to manufacture optical fiber preform in Wujiang, Jiangsu, China. The share sales value was not disclosed. Furukawa Electric and Hengtong sign a share sales and JV contract on December 28.

FXOC will become controlled by Furukawa Electric with 49% shares and Hengtong with 49% shares while the rest 2% shares will be held by the other Chinese enterprise. The closing is scheduled at the end of March 2012. Furukawa Electric aims to double FXOC’s annual revenue three years later from currently estimated 130 million yuan (approximately 1.56 billion yen) in CY2011 through collaboration with Hengtong. Hengtong is ranked among no.2 shareholder group in Chinese optical telecom cable market.

Furukawa Electric’s 100% U.S. subsidiary, OFS and Hengtong established an optical fiber preform plant in Wujiang in November 2010 along their JV scheme.