Fiber-optic giant expanding overseas

Hengtong Group Co, a producer of optical fiber and telecom network equipment, aims to increase its overseas investments and acquisitions to take advantage of huge growth potential in countries along the Belt and Road Initiative.

The Jiangsu-based company says it plans to establish two to three overseas industrial bases and make a similar number of acquisitions in other countries each year.

In the internet era, construction of telecom networks, particularly those using fiber-optic cables, has become a significant indicator of a country's development. The company has stepped up building such networks in overseas markets.

"If there is no optical fiber, there is no internet, let alone big data and cloud computing," says Cui Genliang, chairman and president.

Cui says communication infrastructure is relatively backward in some countries along the Belt and Road Initiative, so there are huge opportunities for Chinese companies like Hengtong to expand overseas.

The initiative aims to build a trade and infrastructure network connecting Asia with Europe and Africa, along ancient trade routes.

"We will firmly grasp the opportunities brought by the initiative and continue to push forward the internationalization strategy in the next decade," Cui says.

Founded in 1991, Hengtong has seen its businesses expand from telecom and electric power to finance, culture, tourism, real estate, capital investment and internet platforms.

The optical fiber giant now serves various national programs, including intelligent cities and communities, ultra-high voltage and intelligent power networks, new energy, ocean engineering, big data, internet of things, high-speed trains, aerospace, national defense and other high-end fields.

The company has put forward a goal called "50-50-50 internationalization". That means, more than 50 percent of its products will be sold overseas; more than 50 percent of its capital will come from overseas; and more than 50 percent of its professionals will have an international background, according to the company.

It plans to serve both the domestic and international markets, integrate and make use of domestic and international resources and widen the domestic and international financing channels through investments in overseas mergers and acquisitions.

So far, it has established seven research and development centers overseas, and branches for marketing and technology services in more than 30 countries and regions.

It has registered trademarks in more than 100 countries and regions. Its business covers 120 countries and regions. Its optical fiber network products account for 15 percent of the global market.

Its first overseas factory was set up in Brazil in 2012, followed by a joint venture in India in 2013. It also purchased optical fiber and electric power enterprises in Indonesia, South Africa, Spain and Portugal in 2015.

"These moves will promote the industrial transformation, upgrading and global expansion of our company, further enhancing its competitiveness," Cui says, adding that the key to competing with other company is to increase independent innovation, improve core competence and produce products with cutting-edge technologies.

At present, Hengtong is the only Chinese company with state-of-the-art technology in optical fiber communication and owns related intellectual property.

Technological expertise and high-quality products can make a Chinese enterprise into a successful global brand, Cui says.

Additional revenue has mainly come from overseas markets in recent years. In 2015, the company's overseas revenue accounted for 20 percent of total sales.

"Success in international markets is a touchstone of an enterprise's competitiveness," says Gao Anmin, Hengtong's vice-president for international operations.

Contact the writers at fanfeifei@chinadaily.com.cn

(China Daily Africa Weekly 11/25/2016 page30)