Technology Breakthrough Makes Chinese Fiber Optics Entrepreneur A New Billionaire

Wang Jianyi, 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 (2.33 billion 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.

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13 thoughts on “Technology Breakthrough Makes Chinese Fiber Optics Entrepreneur A New Billionaire

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