Fiber and Cable Restructuring Predicted

PROVIDENCE, RI, Jan. 27—Over the past 18 months fiber and cable manufacturers have faced a shrinking telecom market, which has led to a steep decline in fiber optic cable sales. The industry responded by shutting-down and "moth-balling" factories, consolidating facilities, and reducing staff, said KMI Research’s annual report, Worldwide Markets for Optical Fiber and Fiberoptic Cable: Market Developments and Forecast. The report shows that plant closings have reduced the number of fiber-manufacturing facilities from a peak of 65 in 2000 to 46 that were operational for at least part of 2002. Recent plant closings mean that the number of facilities could decrease again in 2003.

The report, noted that "some of the larger market participants with fiber plants in different countries have decided to close one or more plants, consolidating company-wide production to fewer facilities. Some of the factories being closed had capacity of several million km."

KMI forecasts continued industry restructuring next year as the US remains a weak market and as worldwide installations of fiber optic cable show only gradual growth. Slower growth means that in 2007, the worldwide fiber optic cable market will still be well below that of the peak in 2000. But by then, industry participants will have responded to the market changes, and there will be a better balance between the number of suppliers and the demand.

For more information visit www.kmiresearch.com.