Fiber Industry Continues to Boom: How Does the Leader YOFC Plan for the Future?
The three-day "2017 World Optical Fiber and Cable Conference" has come to a successful conclusion. This was a highly valuable conference, inviting industry authorities such as David Payne and Wei Leping to share cutting-edge technologies, the most representative optical fiber manufacturers—the "Big Five"—to discuss development trends, and telecom operators to present their demands. Over 700 guests from nearly 30 countries attended and listened. It can be said that this conference has influenced the entire optical fiber industry's judgment on market prospects and the operational actions of industry enterprises.
YOFC, in cooperation with the consulting firm CRU, brought the World Optical Fiber and Cable Conference to China, contributing to the enhancement of the global influence of China's optical fiber industry. At the same time, as the world's largest manufacturer of optical preforms, optical fibers, and optical cables, YOFC's market judgment and actions are issues of great concern to the industry. "More optimistic market prospects, faster domestic and overseas expansion"—this is the overall tone revealed by YOFC President Zhuang Dan.
Market Demand Continues to Boom
At the conference, Zhuang Dan cited CRU's latest forecast for global optical fiber demand over the next five years. The CRU report shows that from 2017 to 2021, Africa and Latin America will lead market growth, with China's optical fiber demand growing at a compound annual growth rate of 0.7%, and globally at 2.8%. Since global optical fiber shipments reached a record high of 368 million fiber-core kilometers in 2016, CRU predicts continued growth in market demand, which is favorable for industry development.
Compared with CRU, Zhuang Dan is even more optimistic about market prospects. Zhuang Dan pointed out that the global optical fiber market is performing strongly, driven by demand in China that has exceeded expectations, and the actual growth rate will surpass this figure. Countries around the world are actively developing informatization, building optical fiber networks and 5G, with long-term investment plans for networks. For example, the "Gigabit Germany" plan calls for investing $100 billion by 2025 to build high-speed broadband networks; in North America, Deloitte estimates broadband investment of $130–150 billion.
For China, the clearest signal at present is that China Telecom's bidding demand continues to grow unabated, and demand will persist in 2018. China Telecom's latest optical cable centralized procurement scale reaches 50 million fiber-core kilometers. Zhuang Dan pointed out that FTTH construction in the Chinese market is not yet nearing its end, especially as China Mobile continues to invest heavily; the national poverty alleviation strategy will drive fiber broadband access to expand from administrative villages to natural villages; and internet companies building large data centers will also bring substantial optical fiber demand. Over the next 3 to 5 years, the compound annual growth rate of the Chinese market can reach 15%.
"We used to consider when the lack of effective demand would arrive. Now it seems that effective demand is still very strong," Zhuang Dan said in an interview with the media.
Depth and Breadth of Innovation
The optical fiber industry seems to focus more on market competition, and whenever technological innovation is mentioned, it often refers to optical preform technology. China's optical fiber industry has developed rapidly over the past decade, and has now basically captured the domestic market and expanded overseas. However, there has always been the awkward situation of being "large but not strong," lacking the core technology for manufacturing optical preforms. Until this year, the shortage of optical preforms has still not been alleviated.
Of course, it is not a shortage across the entire industry. Several major manufacturers have basically mastered the technology, and YOFC is among the best. It is reported that as early as 2003, YOFC achieved large-scale and industrialized production of a new generation of preforms, and through its "multi-process" strategy, strengthened innovation in other preform manufacturing technologies. By this year, it has mastered the three major preform manufacturing processes—PCVD, VAD, and OVD—and possesses some equipment manufacturing capabilities. Currently, YOFC's Qianjiang Industrial Park is expanding preform production capacity to meet market demand in the coming years.
In addition, YOFC is an industry leader in new types of optical fibers such as ultra-low attenuation large effective area fibers and OM5 bend-insensitive multimode fibers. In the 2016 national "Industrial Foundation Reinforcement" project, YOFC's "ultra-low loss optical fiber" was one of only two projects in the industry to be selected.
"At every key node of product innovation, YOFC has advanced to the forefront of the industry. Technology introduction, digestion, absorption, innovation, and then output—each link in the output process rises in a spiral. We have gone from the earliest learners to later followers, and now to leaders. This is a process of transformation. We have also driven the overall technological progress and industrial development of the entire industry. When preparing the presentation for this conference, I emphasized one point very strongly: YOFC must be 'technology-led,' and the ultimate goal is to promote the common development of the entire industry. YOFC's technological innovation is also tirelessly moving in this direction," Zhuang Dan stated.
Zhuang Dan pointed out that disruptive innovation is difficult to achieve in the optical fiber and cable industry, but innovation based on optical fibers and cables has never stopped. YOFC always upholds the spirit of innovation, developing new technologies and new products that meet customer needs to address the challenges of the new era. "Our goal is to build an enterprise with the strongest overall competitive strength across the industrial chain."
At the same time, on the basis of deepening the industrial chain, YOFC has made multi-point deployments around its "related diversification" strategy. Examples include Changxinsheng's active optical cable (AOC), Xinguangyun's all-optical desktop cloud platform, the acquisition of Wuhan Ankai, the establishment of YOFC General Cable Company to enter the feeder cable business, as well as upstream and downstream industrial chain extensions, including optical fiber and cable raw materials, data centers, and consulting services.
Rapid Deployment Along the "Belt and Road"
China's huge domestic demand market, accounting for more than half of the global share, has contributed to the success of more than ten optical fiber manufacturers including YOFC. In terms of scale, YOFC is the global leader in the entire optical fiber industrial chain. However, to become a world-class leader in the optical fiber industry, it is necessary to "go global," compete with overseas giants on the same stage, and seek greater market space.
YOFC's "going global" was not early, but the pace has been very fast. Zhuang Dan said that under the "Belt and Road" initiative, YOFC has made deployments both domestically and internationally. Domestically, there are Lanzhou, Shenyang, Zhejiang, and Qianjiang; internationally, there are Myanmar, Indonesia, and South Africa, where YOFC has established optical fiber and cable manufacturing bases. "YOFC Lanzhou Company radiates to Central Asia, and YOFC Shenyang Company radiates to Northeast Asia. YOFC Indonesia Optical Fiber Plant is our first optical fiber enterprise in Southeast Asia, and its operations are currently very good, with the potential to become the most influential optical fiber supplier in Indonesia and even the ASEAN region. YOFC Myanmar Optical Cable Project recovered its costs within one year of production, and it is now in its third year of operation. YOFC South Africa Plant took less than a year from the start of construction to production, and its current operating conditions are relatively good in all aspects."
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