Sunsea-Enablence joint venture targets Chinese FTTH market
Ottawa, ON, Canada--Enablence Technologies, a supplier of fiber-to-the-home (FTTH) equipment for triple-play residential and business services and optical components (including planar lightwave circuit (PLC) technology) and subsystems for access, metro, and long-haul markets, is entering into a joint venture with China's Sunsea Telecommunications Co. Ltd., a move that it says will strategically position Enablence's Optical Components and Subsystems Division to capitalize on the vast opportunity presented by 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 based on Enablence's proprietary PLC platform in high volumes. Its product lines will further expand into PLC-based modules and transceivers.
SUNSEA is a developer and manufacturer of physical telecommunications network equipment in the Chinese market. It has also built a significant 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. Enablence will hold a 49% 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.
According to the FTTH Council Asia Pacific's Market Vision report released in November 2010, China is poised to catch up with Korea and Japan as a primary growth engine for the region's adoption of FTTx networks for home and business.
SOURCE: Enablence; http://cnrp.marketwire.com/client/enablence_technologies/release.jsp?actionFor=1368228&releaseSeq=0&year=2010
Posted by:Gail Overton
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