At SubOptic 2023, Telecom Review Asia connects with Christian Priess, Head of Central Europe, Africa and Middle East at Hexatronic, to learn about the company’s ongoing efforts to grow its expertise, expand new revenue streams and grow its geographical market presence in FTTH and subsea cables globally.
Can you tell us more about Hexatronic and its developments?
Hexatronic creates high quality fiber networks all over the world. We partner with customers on four continents – from telecom operators to network owners – to offer leading, high-quality fiber technology for every conceivable application. Our solutions encompass FTTH, undersea cable, harsh environments, data centers and many other areas.
Complementing our work, we possess advanced training capabilities. In all the markets that we operate in, we offer field support services with highly-experienced technical teams who are constantly in the field assisting our customers with their deployments.
Can you tell us about Hexatronic’s key markets and how is the company planning to expand its expertise and reach moving forward?
Our focus is on both the FTTH market – fiber or hybrid solutions for 5G, WiFi and CCTV – and the sensor market. We have a clear growth strategy to grow by more than 20% each year through a mix of organic growth and acquisitions. The main growth markets for us are Europe and North America. We target to undertake a number of acquisitions per year, depending on the opportunities available, in order to support our continuous advancement.
Three key focus markets in these areas include the USA, UK and Germany. In the USA, for instance, we are expanding into data center solutions through acquisitions such as Data Center Systems. Two years ago, we built a duct factory in Texas. Currently, we are completing a factory in South Carolina.
In the UK, we have also completed several acquisitions, and as a result, we have established a healthy base of customers in the country, with CityFibre being one of the largest. In Germany, we also initiated a couple of acquisitions two and a half years ago and are now working with German providers to expand their fiber networks.
Additionally, for submarine cables, Hexatronic adopts a very flexible approach to cable supply. From our dedicated manufacturing facility in Hudiksvall, Sweden, we are able to provide smaller lengths of cable (up to 500 km) for customers with shorter system requirements. We also support fast turnaround times for quotations, manufacturing and supply to sites. We are happy to work on more complex projects in challenging environments. Our dedicated team of experts operates with a strong customer focus which helps extend our reach.
We have seen many acquisitions made by Hexatronic recently. Can you share some details?
Our most recent acquisition is Rochester Cable from TE Technologies. This deal closed only a week and a half ago, after signing the initial agreement in October 2022. Rochester Cable is a recognized leader in designing and manufacturing electro-optical cables to meet specific requirements in demanding industries such as oil and gas, sensing, defense, oceanographic and other subsea applications. The electro-optical cables can accommodate extreme water depths of up to 6,000 meters and connect various sensors, equipment and remotely operated vehicles.
Aligned with our strategy to enhance our “harsh environments” solution. Rochester Cable broadens Hexatronic’s offering within fiber optic submarine communication cables to include dynamic working cables that transmit electrical signals and power in addition to transmitting optical signals.
In the Asia Pacific region, a recent acquisition is KNET, a micro duct manufacturer with a production plant and head office in South Korea, who has been our major supplier for many years. Acquiring KNET is a strategic move that gives us access to a high quality and high-volume production plant strategically located to serve our businesses in North America, Europe and Oceania.
Speaking of acquisitions, Hexatronic’s recently published year-end report for 2022 also looks to further acquisitions in the future. What is next?
In 2022, Hexatronic continued to report strong growth, particularly in the USA, UK and also Germany. Sales grew by 88% compared to the preceding year, of which organic growth accounted for 53% of overall growth. We are currently exceeding our EBITDA target of 15-17% over a business cycle, and future acquisitions will help us sustain this growth.
Going forward, we will leverage our capabilities and knowledge in FTTH to tap into newer business areas. Our main acquisition objectives will be in three key areas, including wireless, fiber optic solutions for harsh environments and data centers.
Can you tell our readers about the latest subsea projects that Hexatronic has been involved with?
We have undertaken recent subsea cable deliveries to Asia from our dedicated factory in Hudiksvall, Sweden. At the same time, we are in the process of delivering subsea cables for offshore wind projects in Northern Europe and power interconnector projects in the USA.
Our factory has been busy, and business has been brisk, with many opportunities in the pipeline. We continue to research increased fiber count and new fiber types to provide lower attenuation and a larger effective area, leading to a longer reach for an improved submarine cable offering.
Hexatronic has a strong position on sustainability. What are your specific areas of focus?
At Hexatronic we have built a ‘Sustainability Roadmap’ which is founded on six priority areas.
- Reducing climate impact
- Creating a sustainable supply chain
- Having strong business ethics
- Creating a good health, safety and working environment
- Ensuring diversity and gender equality
- Increasing social involvement
The roadmap shows our contribution to the UN 17 Sustainable Development Goals, outlining our desired position in 2030 and the targets, goals and key actions that will get us there.
It is very important for cable system suppliers, component manufacturers and marine vessel operators, as providers of critical infrastructure, to take their responsibility to the planet seriously.
We have put in place 13 key actions to reduce our impact on the environment. Our main focus is high-resource efficiency and offering more sustainable products and services. Some practices include reducing goods transportation by optimizing pack sizes, coordinating product deliveries, improving forecasting and establishing local production.
We also alter our modes of goods transportation from air to shipping or train to move toward a zero-emissions vehicle fleet and introduce new climate-adapted materials and technologies. Generally, sustainability is a top focus for many businesses around the world, and not only in our industry. We take on a holistic approach to ensure sustainability and stay committed to 1.5oC science-based emissions-reducing targets.
Essentially, we believe that the more people who can access what the future has to offer, the better all our tomorrows will be. Our solutions aim to enable non-stop connectivity for communities worldwide, creating a lasting link to the future.
