(Yicai Global) April 12 -- Shenzhen SDG Information Co. will establish an optical fiber preform production joint venture in central China’s Hubei province in tandem with the locally-based Hong Kong-listed Yangtze Optical Fibre and Cable Joint Stock Limited Ltd. to supply rising demand, which will grow globally to a projected 11,600 metric tons this year from 8,150 metric tons in 2012, statistics portal Statista reported.
The substantial increase in domestic and international demand for optical fiber and the insufficient production capacity of preforms have triggered a supply shortfall, the company said.
The registered capital of the proposed JV is CNY300 million (USD48 million), of which YOFC will contribute CNY195 million or 65 percent , while the remaining CNY105 million or 35 percent will come from Shenzhen SDG Information, the maker of optical fiber, the maker of optical cable and other communication equipment said April 10.
A preform is a solid glass rod, which is then converted into a hair-thin fiber in a process called fiber draw. The preform’s tip is threaded into a graphite furnace where controlled temperatures nearing 1900°C soften its tip, whereupon gravity pulls the molten material into ‘freefall’ until it stretches into a thin strand that passes through an array of coating dies pulled by a traction belt at the bottom of a draw tower where it is then spooled onto winding drums. The diameter of the drawn fiber is 125 microns within a tolerance of only 1 micron. A dual-layer protective coating is then applied, cured by ultraviolet lamps. This double jacket shields the fiber. Drawing is automated and needs almost no operator input after threading.
The optical fiber preforms the JV makes will be first used to supply the demand of a production company affiliated to Shenzhen SDG Information, and will guarantee steady raw material supplies to the unit to produce its optical fiber and optical cables.
YOFC claims a 22.5 percent share of the global optical fiber preform market, a 17.3 percent slice of the global optical fiber market, and a share of 15 percent in the global optical cable market.
Major YOFC shareholders include China Huaxin Post and Telecommunications Economy Development Centre and Draka Comteq BV from the Netherlands, each with a 26.37 percent stake, and Wuhan Yangtze Communication Industry Group Co., which holds 17.58 percent.