Chinese buy Cork fibre optic cables firm

CORK-BASED Firecomms has been acquired by Chinese corporation the ZJF Group in an all cash deal.

The terms of the deal have not been released but employment at Firecomms will increase from 18 to 30 over the next year due to a €5 million investment in research and development by the new Chinese owners.

Firecomms designs semiconductors which enables low-cost plastic fibre optic cables to be used for high-speed communications in home, industrial and motoring applications.

The privately-held ZJF Group is headquartered in Zhejiang, China and employs more than 3,000 staff developing products based on plastic optical fibre. It supplies LED lighting products to major retailers including Walmart, Target and BQ.

Firecomms chief executive Declan O’Mahoney said the deal would enable the Cork company to expand rapidly in China but ZJF would retain the Firecomms brand and all its staff.

Mr O’Mahoney said China has been Firecomms’ largest market for some time.

“As the ZJF Group is a major global player in this sector, today’s announcement not only allows us to guarantee investment capital and job growth for the future, it also provides us with access to the world’s largest marketplace for our technology,” said Mr O’Mahoney.

Various Chinese provincial governments have ordered that plastic optical fibre be used for the roll-out of new broadband and telecoms services rather than traditional copper wiring.

“Delivering this infrastructure with copper cables would result in over one million tons of CO2 emissions for China and would be impossible to implement as the demand for copper would far outweigh the world’s supply,” said Xuping Zheng, chairman of the ZJF Group.

Firecomms company was spun out of the Tyndall National Institute in 2001. ZJF Group was one of its largest customers in China.

Firecomms backers included the Swiss state telco, Swisscom, which led a $5 million investment round in 2009; Japanese automotive electronics maker Alps Electric; London investment bank GP Bullhound; venture capital firms Atlantic Bridge and ACT Venture Finance; and State development agency Enterprise Ireland.

Atlantic Bridge, which was founded by former executives at chip design firm Parthus, was the first institutional investor in Firecomms and had a 50 per cent stake at the time of the sale.

Brian Long, managing partner at Atlantic Bridge and a director of Firecomms, said: “We are very pleased with this outcome”.

IDA Ireland chief executive Barry O’Leary welcomed the deal and said his agency’s strategy called for an increase in investments from new high growth markets such as China.