By John Keller
EAST GRANBY, Conn. — The disastrous telecommunications industry downturn has left many optical-fiber companies reeling and grasping for ways to keep their businesses afloat.
One company, Nufern of East Granby, Conn., chose to put its telecommunications activities temporarily on hold and turn to military and aerospace applications. The result is a tenfold increase in Nufern's business since its lowest economic point in late 2002, says Nufern President Martin Seifert.
Nufern's expertise is specialty optical fiber that can carry extremely high amounts of light at precise levels. Like many optical companies, Nufern hitched its fortunes to the telecom boom of the late 1990s.
"In 2000 the rate of rise in telecom was beyond ballistic; we increased our business by a factor of five in one year — we quintupled our business from Q-1 to Q-4 of that year" says Seifert, who also is Nufern's chief executive officer.
"But in 2001 the exact opposite drop happened," he says. "We went to lower than where we started, and of course this happened after we ramped up like mad to meet demand."
Nufern leaders had to find something to stem the financial hemorrhaging. Seifert, a veteran of Rockwell Automation in Milwaukee, turned his company in the direction of military and aerospace applications, and he has never been sorry about his decision.
While only three years ago Nufern officials faced the challenge of keeping up with telecommunications industry orders for their specialty fiber, today 80 percent of the company's revenue comes from military customers — particularly those building fiber-optic gyro and fiber-optic laser systems.
"In March of 2002 we made the strategic decision to go after the gyro and laser business; Darwin said the race doesn't necessarily go to the fastest, but to the fastest to adapt," Seifert says. "In the gyro space nobody has ever made a fiber-optic gyro that can beat the performance of the best mechanical gyros, so the fiber-optic gyro was always the gyro with potential."
Nufern experts are concentrating on several specialty fibers, including those that resist the effects of high levels of radiation, and those that can be wound very tightly. Radiation-resistant fiber can help build optoelectronic systems able to operate through atomic blasts, and tightly wound fiber can help yield some of the smallest fiber-optic gyros for inertial measurement units (IMUs) ever built.
"Look at all the successes of smart weapons being dropped out of aircraft," Seifert says. "People want to implement smart weapons down to shoulder-fired weapons, and to do that you have to shrink the IMU."
Although Nufern's revenues have not matched the highest levels of the telecom boom, the company's earnings are 10 times what they were at their lowest point in late 2002, Seifert says. That level is about half of the company's highest earnings in 2000. He would not state revenue numbers because the company is privately held.
A big part of Nufern's approach is to produce specialty optical fiber that designers could apply in a wide variety of systems — a strategy, which other companies might do well to emulate, Seifert says.
One example is Nufern's high-power fiber for continuous-wave and pulsed-laser applications. The same fiber, with few modifications, could support 2- to 3-kilowatt high-power laser applications, or 2- to 3-watt cable television (CATV) applications, Seifert says.
"We have chosen to invest in a technology that enables several areas of interest, and in dramatically different ways," he says. "My advice to companies is to try to find a technology that, with very slight adaptation, can address a number of key problem areas. For us the fiber laser does that."
Nufern leaders do not expect to ignore telecommunications forever, Seifert says. In fact, "telecom came back on our radar screen in the last month. The market that is hot now is broadband access, which is in the CATV market. That has just turned on, and requires the same fiber we developed for our high-power lasers."
While military and aerospace applications have helped lift Nufern out of the telecom downturn, Seifert points out that government-supported markets can be problematic.
"Everybody is talking about homeland security, but we have yet to see a dollar from homeland security," he says. "Military spending is fickle; it comes and goes. It's hard do find out which ideas will really gain momentum."
