Chinese-owned Yangtze Optics Africa Cable has invested R150 million in local optical fibre cable manufacturing in SA.
The Chinese company has roped in JSE-listed Mustek as its broad-based black economic empowerment partner.
A further R150 million investment is expected in the machinery and other equipment at the facility located within the Dube TradePort in KwaZulu-Natal. This investment is seen to have the potential to significantly bolster SA's efforts to grow exports and expand communications infrastructure.
Yangtze is targeting SA's growing fibre market, with many companies jostling to lay fibre to boost Internet connectivity.
According to BMI-TechKnowledge, fibre-to-the-home (FTTH) could reach more than 360 000 active subscriptions in SA by 2019, with the majority of the growth coming from subscribers in residential suburbs, where much of the recent action has been focused.
It notes FTTH deployment and uptake gained momentum last year, with impetus from the initiatives started in communities such as Parkhurst, and the advent of open access models incentivising Internet service providers to offer attractively-priced broadband services over these fibre links.
Manufacturing capacity
Pieter Viljoen, CEO of Yangtze Optics Africa Cable, says a range of new generation optical fibre cable products will be manufactured locally after the completion of the facility for the South African ICT market, as well as key export markets in West and East Africa.
"With an envisaged manufacturing capacity of more than one million fibre kilometres, Yangtze Optics Africa Cable will play a significant role in enabling SA's development of a sustainable broadband future. This is especially important, given the shortfall with regard to current and envisaged demand from new fibre-to-the-home project announcements and cellular operators' migration to 4G and LTE services versus supply."
According to Viljoen, the demand for optical fibre cable products, specifically for FTTH undertakings, significantly outstrips local availability.
"The company will supply optical fibre cable and FTTH solutions to the local telecommunications market, including industry players such as Telkom, Neotel, Vodacom, MTN, Cell C, Vumatel and Link Africa, among others. We are targeting both the public and private sectors, with the aim of significantly bringing down the cost of optical fibre cable in the country.
"Local manufacturing will be critical in increasing the number of players in this space and in turn bringing down local costs."
The new manufacturing facility is expected to create approximately 150 new jobs. High-level technical skills development will be at the forefront of the company's skills development programme and a number of employees will be identified for specific skills transfer initiatives, including opportunities to travel to China to gain greater knowledge about the manufacturing of optical fibre cable.
Zhuang Dan, CEO of Yangtze Optical and Cable, China, says the company has committed itself to a four-year skills development plan to expand local skills in specialist roles, such as cable manufacturing, while the opportunity for employees to travel to China will provide vital exposure to new methods of doing things.
"Our aim is to expand this approach to other African countries and create a pool of local skills across Africa that investors can tap into, should the need arise. Optical fibre cable broadband technologies are the future and Africa presents opportunities for future investments. We are preparing for a boom in African investments and want to be ready to provide solutions that will help enable that growth," Zhuang adds.
He referred to a commitment made by the Chinese Ministry of Information Industry at the Forum on Africa-China Co-operation, held in SA last year.
According to the "Trans Africa Information Superhighway" blueprint presented at the forum, a total of 150 000km of optical fibre cable network is to be built over the next several years, with the intention of covering 82 major African cities across 48 countries and connecting 1.1 billion people on the continent.
Growth potential
Speaking at the official breaking-ground ceremony, MEC for economic development, tourism and environmental affairs Michael Mabuyakhulu welcomed the decision by Yangtze to establish a manufacturing plant at Dube TradePort.
Mabuyakhulu said the investment has given the province's vision of taking its Internet connectivity to the next level a shot in the arm.
"This R150 million fibre-optic investment by Yangtze Optics Africa demonstrates the massive growth potential within KwaZulu-Natal and SA as a whole as we gear up to meet our goal of ensuring universal Internet access."
Dube TradePort says the move by Yangtze to locate its new manufacturing facility within the Dube TradePort's Special Economic Zone adds further credence to Dube TradePort's status as a prime investment destination, having already successfully secured R1.4 billion in private investment.
"This multimillion-rand investment also re-enforces Dube TradePort's sector-led strategy of attracting a cluster of electronics and ICT industry manufacturers in Dube TradeZone," says chairperson of Dube TradePort's board, Bridgette Gasa.
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