Furukawa Electric to Acquire Optical Fiber Cable Maker in Brazil

Furukawa Electric announced on Monday the firm basically agreed in acquisition of all shares of Brazilian optical fiber cable maker, Metrocable Industria e Comercio, with the shareholders. Furukawa Electric recently applied to Brazilian fair trade commission for approval of the acquisition. The acquisition value is unrevealed. Furukawa Electric Group’s production capacity of optical fiber cable in Brazil will increase by about 20% in volume. The Group aims to expand telecommunication business revenue in Brazil by 20-30% toward 2014 including optical fiber cable, copper telecom cable and LAN cable.

Furukawa Industrial S.A. Produtos Electricos (FISA), Furukawa Electric’s 100% subsidiary to manufacture telecom cables in Brazil, will acquire all shares of Metrocable. FISA’s annual revenue was approximately 17 billion yen in 2010 while Metrocable’s annual revenue was approximately 1 billion yen. FISA’s sales share of telecom products is currently 30-35% in Brazil. The market share is expected to approach 40% by the acquisition.

In Brazil, Summer Olympics will be held in 2016, followed by the World Cup in 2014. Along these big events, construction of telecom infrastructure will be promoted and optical fiber cable consumption will increase. Furukawa Electric aims to follow the strong demand growth by capacity expansion in the country. Furukawa Electric plans to supply optical fiber from Mie plant in Japan, OFS Fitel of the U.S. subsidiary and other bases to improve Metrocable’s quality and cost competitiveness. Furukawa Electric also eyes optimization of the producing items is also eyed between FISA and Metrocable.