AFOG Looks for Potential Partners to Expand Fiber Optic Business

AFOG Looks for Potential Partners to Expand Fiber Optic Business

American Fiber Optics Group, Inc. or shortly known as AFOG is looking for potential partners to expand its fiber optic business. The new entrant in the fiber optic supply industry recently in the United States is already in the business for making optical preforms. AFOG is owned by Capstone Technologies Group Inc. The group has announced that its Fiber optics division is looking for partners to expand manufacturing of fiber optic products in the United States. AFOG is currently building optical fiber preform factory in Detroit. In order to meet ever growing global optical fiber demand that is expected to be over 460 million fiber kilometers in 2017, AFOG has well thought plans to develop and expand its facilities

This facility will be a state-of-the-art facility using USA technology to manufacture optical fiber preforms that will be used to manufacture fiber optic cable for US and Worldwide markets. The AFOG facility will have many advantages over other main competitors in Japan and China due to the availability of an existing skilled workforce abandoned by industries leaving the area, lower tax restrictions, unused manufacturing facilities and a USA jobs oriented atmosphere in the new US Government administration in 2017.

AFOG is planning to begin building in stages. AFOG initially targets 20 million fiber kilometer per year preform capacity plant with a total of 10 million kilometers coming online at the end of year one with a steady increase up to 20 million kilometers of preforms by the end of year two. AFOG’s entrance to the preform manufacturing will add jobs in the local market. It is estimated that around 100 jobs will be created in the Detroit area. Thus AFOG will add to the national policy to create jobs for Americans. The company will receive grants from the government to start the manufacturing location that will create jobs in the local community.

AFOG has prior business background, supplying educational services in China. AFOG has contracted with PPB Engineering and Systems Designs, of Roanoke, Virginia, for the supply of preform-manufacturing equipment. AFOG says with the project’s initial phase in 2017, the equipment coming on-line will support 10 million km of fiber production at the end of the first year. The production capacity can be upgraded to 20 million fiber kilometers after the second year. AFOG says after this two-year effort, the company will expand into fiber drawing, and further investments as the business expands. Usually there is a trend in the manufacturing industry that companies start with fiber drawing towers and then move backward to integrate preform manufacturing. AFOG’s approach is different by starting with Preform manufacturing and then moving towards fiber drawing. The decision came from the fact that fiber industry is facing shortage of preform, a situation which needs to be addressed seriously in order to meet the market demands. AFOG’s decision makes sense inasmuch as the market currently has a shortage of preform capacity.

The Group said it is developing an optical cable manufacturing facility to be located in Detroit. AFOG said the fiber optic cable business will be a joint venture, but in late December, it could not name the partner as terms had not been finalized. The company has said it is investigating the use of unused manufacturing facilities in the Detroit area. This may be a way to lower capital costs, if a suitable facility can be located.

The demand for optical fiber cables has been growing exponentially and the cable manufacturers have been struggling to meet the demand primarily due to the shortage of optical fibers in the market. All of the optical fiber suppliers have reached to the peak of their maximum capacities. Some of them had announced expansion, while many had already completed capacity expansion. Market reports have suggested that Optic Cable will show an annual growth of more than 11%. Fiber shortage is reported due to the preform manufacturing limitation. Only a handful of manufacturers are involved in the manufacturing of optical preform. It is known in the industry that profit margin is higher in the preform supply. Compared to cables and fibers drawing, optical preform suppliers are few in the market. There is a strong growth associated with high margins. Preform manufacturing is a complicated process and it needs a lot of time to establish consistent quality product.

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