ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, June 18, 1996 TAG: 9606180061
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
A FIBER-OPTIC CABLE maker in Roanoke County has landed a contract to put 3,000 miles of it in Japan.
Optical Cable Corp. said Monday it is moving into a new line of business in a big way.
The Roanoke County fiber-optic cable manufacturer has secured a $13 million contract to supply 3,000 miles of telecommunication cable to a Japanese trading company, said President Robert Kopstein. He declined to name the Japanese company, citing reasons of competition.
The telephone and telecommunication market, for which the new cable will be produced, is at least 10 times larger worldwide than the short-and moderate-distance data-communication market that has been Optical Cable's historic source of business, Kopstein said.
The new contract, secured by Paul Oh, vice president of sales for the Far East and Pacific region, should help position the company to participate in a rapidly expanding global market for telecommunication cable, Kopstein said. Since fiber-optic cable went into commercial use a little more than 15 years ago, about 2.6 million miles have been installed worldwide, and it is being installed at the rate of about 380,000 miles a year.
Luke Huybrechts, senior vice president for sales, said the company sees tremendous growth opportunity in foreign markets, particularly in countries that are rebuilding and modernizing their communication systems. The company already has customers in 65 countries, he said.
The cable produced for the Japanese company will be used for feeder or local-distribution phone lines. Optical Cable has an advantage over its competitors in the local-distribution market, because its cable can be installed either indoors or outdoors, making installation faster and easier, Huybrechts said.
The 3,000 miles involved in the new contract is roughly equivalent to what a large regional telephone company in the United States such as Bell Atlantic Corp. would use in one year, said Richard Mack of Kessler Marketing, Newport, R.I. Japan's phone company, NTT, has been aggressive in the installation of fiber-optic cable, Mack noted. Kopstein said he didn't know if the cable was ultimately going to NTT.
Also Monday, Kopstein announced the company's second-quarter financial results and plans to expand Optical Cable's Roanoke County plant.
The company will break ground this month for a new $4.5 million building that will double the size of its plant in Valleypointe business park and provide jobs for about 200 new employees over time, Kopstein said. The building is expected to be complete by November.
Optical Cable employs 110 people in production shifts around the clock Monday through 4 p.m. Fridays. The existing building has room for about 50 more employees, Kopstein said.
For its second quarter ended April 30, Optical Cable reported net income of $2.07 million on sales of $10.2 million, compared with net income of $2.03 million on sales of $9.5 million for the same period last year. For the first half year, the company had net income of $4.8 million on sales of $20.5 million, compared with net income of $3.5 million on sales of $17.6 million during the same period a year earlier.
Earnings per share, adjusted for a stock split June 5, were 4 cents for the quarter and 8 cents for the six-month period. The company offered public stock for the first time in March, so year-earlier earnings per share were not reported.
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