JDS to hire 2,400 more Vast demand spurs fibre-optic firm's rapid growth
James Bagnall
The Ottawa Citizen
When Nepean-based JDS Fitel Inc. went public three and a half years ago, it
operated a modest, 80,000-square-foot manufacturing plant and employed about
500.
Yesterday, the fibre-optic components company -- which now operates under
the name JDS Uniphase Corp. -- unveiled a sweeping, $125-million (U.S.)
expansion program that will make 1996 feel like a quaint and distant era.
The immediate objective is to create, by next December, a global technology
power with some 2.1 million square feet of office and manufacturing space and
more than 11,000 workers at its disposal. More than 60 per cent of the firm's
real estate and workers will be in the Ottawa area.
"We're adding capacity all over the world," chief executive Kevin Kalk-hoven told
shareholders at the company's annual shareholders meeting.
"If you look at the (demand for our products) we almost have to double every
year for the next couple of years," he added.
Not since Nortel Networks Corp. launched its dramatic hiring binge in the
mid-1980s has the Ottawa region witnessed such a dramatic rise in the fortunes
of a single firm.
About 6,000 of JDS Uniphase's 8,000-plus global employees currently work in
Nepean and surrounding area. By next December, the company expects to hire
another 2,000 to 2,400 in Ottawa, boosting the total here to more than 8,000.
This compares with 13,000 full-time workers at Nortel, the region's largest
high-tech employer, and roughly 3,000 at Newbridge Networks Corp., the
next-largest technology firm.
However, many JDS Uniphase employees earn less than $30,000 annually --
considerably less than their counterparts at Nortel and Newbridge. This is
because the nature of their jobs is more akin to assembly-line work than the
design of networks. But, thanks to the company's practice of granting share
options, JDS Uniphase workers with at least three years' seniority have
accumulated credits worth more than two years' salary.
Indeed, anyone who invested in the company at the beginning of this year would
have seen the value of their shares soar 620 per cent as of the close of trading
yesterday.
JDS Uniphase closed at $249 7/8 on the Nasdaq exchange, up $21 1/4 on the
day.
Not surprisingly, shareholders yesterday expressed very little dissatisfaction with
the company's performance. They approved a plan calling for a two-for-one split
of the company's stock, which will be effective on the Toronto Stock Exchange
next Monday.
At a packed meeting of more than 600, perhaps the toughest question related to
whether Mr. Kalkoven, 55, intended to stay in the top job.
His reply, a paraphrase of advice his Australian uncle gave him: "You never leave
a party 'til the booze runs out," he said, "and the reality is, the booze ain't run
out."
For this, he can thank the Internet, which is adding millions of new users every
few months. Not only that, but each subscriber is using faster modems. The
result has been exponential growth in digital traffic in the form of e-mails and
streaming video.
Optical technology is uniquely well-equipped to deal with the rising tide -- and
JDS Uniphase is right at the centre of the fibre-optic revolution. It provides a
host of components -- from lasers to optical ampliers -- to companies like Nortel
and New Jersey-based Lucent Technologies Inc. that actually build fibre-optic
networks.
JDS Uniphase also supplies more than 30 fibre-optic startup firms.
But there's a catch. If JDS Uniphase can't boost its capacity fast enough to suit
the needs of the these "systems" players, then they'll do the job themselves.
Hence, the need for a rapid-fire increase in production.
JDS Uniphase said yesterday its latest expansion will add about 40 per cent to its
plant and office space.
Slightly more than half the new construction activity will take place in south
Nepean where JDS Uniphase plans to build a 360,000 square foot facility.
"I don't know when we are starting," JDS Uniphase chief operating officer Jozef
Straus said, "but we are already late."
The company is also expanding existing operations by 240,000 square feet in
Sydney, Australia; Bloomfield, Conn.; West Trenton, N.J.; Chalfont, Pa.;
Melbourne, Florida; and Torquay, U.K.
Mr. Kalkhoven said it's difficult to be precise about how many employees will be
hired to staff the new facilities. He explained the final total will depend on the
firm's success at boosting the productivity of its plants.
JDS Uniphase's ultimate objective is to double its manufacturing output by next
December, using a combination of plant expansion, increased automation and
acquisitions.
"This meets our requirements at least for the next calendar year," Mr. Kalkhoven
said in reference to the physical expansion.
JDS Uniphase's revenues aren't expected to rise quite as fast as its production
levels, in part because of pricing pressures imposed by its principal customers.
The company's sales are expected to top $1.1 billion U.S. in fiscal 2000 (ending
June 30) -- up 90 per cent from fiscal 1999 -- and rise another 55 per cent or
more in fiscal 2001. |
