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Chinese firm YOA to expand Durban fibre plant

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 27 May 2022

Optic-fibre cable manufacturer Yangtze Optics Africa Cable (YOA) is looking to expand its Durban-based plant.

The company says it has seen exponential growth since commencing operations at Dube TradePort Special Economic Zone, in Durban, in 2017.

In 2016, ITWeb reported that Chinese-owned Yangtze Optics Africa Cable had invested R150 million in local optical fibre cable manufacturing in SA.

At the time, a further R150 million investment was expected in the machinery and other equipment at the facility.

Now YOA plans to expand into a bigger factory in Dube TradeZone 2, although a date for this expansion is yet to be pinned down.

Pieter Viljoen, YOA chief executive, says by mid-2019, YOA, one of five optic-fibre cable manufacturers in South Africa, was using 50% of its one million fibre kilometre plant capacity.

According to the firm, in 2020, this rose to 65% and in an “exceptional” 2021-year, plant capacity hit 95%.

It notes that demand for fibre was being driven by South African consumers’ avid consumption of and demand for faster, easier internet connectivity, accelerated by the onset of COVID-19 and a major shift to working from home.

The auction of the 5G spectrum will only accelerate this demand, Viljoen says.

Shifting consumer behaviour

ICASA’s 2021 report on the state of the ICT sector in South Africa shows the rapid shift in consumer behaviour during lockdown, says YOA.

It adds that revenue from prepaid mobile data and messaging increased by 80.2% and 35.8%, respectively, in 2020, while prepaid mobile voice revenue dropped by 29.5%.

This was accompanied by an increase in smartphone subscriptions from 53 million in 2019, to 60 million in 2020, says the company.

According to the firm, YOA made its first profit in 2019, within two years of starting production. By 2020, it became sustainable, spurred on by the COVID-19 lockdown and demand for fibre-to-the-home, the company’s ability to continue to operate at full capacity as an essential producer and a shift in the type of fibre products manufactured.

It points out that Dube TradePort also played an enabling role in the company’s ability to get off the ground quickly.

Being close to a port was a key consideration in finding a suitable site for the plant, says YOA, adding that Dube TradePort’s assistance in qualifying for the special economic zone benefits and other Department of Trade, Industry and Competition (DTIC) support, the ability to fast-track the construction of a factory and readily available skilled staff, clinched the YOA deal for Durban.

“Last year, we added two additional lines and this year, we will add another three lines, which uses our floor space to its maximum. We have proven ourselves and become a dominant player in the market in a short space of time,” says Viljoen.

Key to YOA’s high growth has been its focus on innovation and research and development (R&D), the company notes.

In the past five years, it has brought five new products to the market, which “have had a significant impact on the market", according to Viljoen.

One of the products designed specifically for clients in 2020 was the drop cable, a short span of cable that connects the home to the fibre cable in the street. This has enabled fibre service providers to fast-track fibre rollout and home connections, the company says.

“We look at the needs of our customers and innovate products that will enable them to provide services to their downstream clients,” says Viljoen, explaining that without R&D and innovation, fibre cable was not much more than a commodity.

Employment boost


Pieter Viljoen, YOA chief executive.
Pieter Viljoen, YOA chief executive.

According to the firm, YOA’s rapid growth has positively impacted employment, with its staff component increasing from 48 people in 2017 to 112 in 2022.

The proposed expansion will further increase employment to 180 people, it says.


Viljoen says employment figures are not as high as originally forecast because the company introduced a financial incentive for staff to become multi-skilled. Currently, a third of the staff are multi-skilled, which provides flexibility on the production floor.

He points out that as much as 90% of components that go into the production of optic fibre cable are imported and subject to the vagaries of currency fluctuations, among other things. Yet, it adds, it was not viable to manufacture these components locally.

The fibre cable industry has had discussions with the DTIC on the point of localisation, according to Viljoen, and initially YOA had also considered setting up a glass-fibre drawing plant, in addition to the cable manufacturing plant.

He points out that it boils down to economies of scale. “The South African market at 2.5 million to three million fibre kilometres is tiny compared to the global market of around 500 million fibre kilometres. Of this, China has a market of 190 million fibre kilometres, the US 70 million fibre kilometres and the EU 60 million fibre kilometres.”

The company currently does business in Southern Africa, mostly with Namibia and Botswana, as the economies are similar.

However, central and northern Africa currently pose multiple challenges, one of which is the need to use the US dollar as the currency of exchange, which makes the product expensive and subject to fluctuation, says Viljoen.

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