Mennica Polska S A : Mint of Poland will build a fibre optic cable to link Middle East with Europe

Mint of Poland will build a fibre optic cable to link Middle East with Europe

19 may 2022

Mint of Poland Group, via a subsidiary, is entering a new strategic area of operations. On 18 May, a contract was signed with Alcatel Submarine Networks, part of Nokia, to build a submarine fibre optic cable as part of the cable system linking Europe with the Middle East. The value of the contract is USD 91.5 million. More contracts will be signed soon, with the total value of the project amounting to USD 190 million. The system is scheduled to be ready for service in mid-2024.

Mint of Poland's new business segment

The rising global demand for data transfer capacity and speed together with the need to ensure its security requires constant development of fibre optic cable infrastructure. To meet that demand, the Mint of Poland will build a new fibre optic cable system linking Milan (Italy) and the Middle East under a comprehensive agreement for construction and maintenance services. On 18 May, a contract was signed with Alcatel, part of Nokia, for the construction of the first of the three sections of the system. The decision of the Mint of Poland's Management Board to enter into a new area of operations was preceded by a complex market study and by striking up strategic partnerships.

- The Mint of Poland is a mature organization on the verge of entering the next stage of specialization. The area of expansion we have chosen is close to us, if only because of our past involvement in the Polish telecom Netia. Considering the geographical directions in which we are going to develop our business, we have also partnered with international experts who have more than 30 years of experience in such projects as construction of a transatlantic fibre optic cable or an 18-country connection link between the UK and Japan. Our situation being stable, we want to grow and invest in new technologies - says Katarzyna Budnicka, interim CEO and President of the Management Board, Mennica Polska S.A. - Our history shows that choosing rather unobvious directions of development really does pay off. In the same vein we have now resolved to develop a new business segment - Telecommunications - which in the long term is expected to bring substantial benefits to the entire Group. The last two years have clearly confirmed that our strategy of business diversification brings measurable benefits to our shareholders and helped us become a market benchmark.

Broad prospects for growth

Given the overloaded global computer network and numerous geopolitical challenges, the need for fast and secure data transfer is growing every year. Operators who are able to provide alternative solutions to the existing ones gain very broad prospects for growth. The major factor at play here is the ability to guarantee your clients maximum security while reducing the risks of potential failures.

- Today, every kilometre of fibre optic cable is worth its weight in gold. However, what we are going to do is taking it one step further by building the new optimum route to connect Milan and the Middle East. It will be the safest and fastest connection ever built in this part of the world. It is not a business for everyone - what you need is the capital, the people and the right partnerships. We have all that and we want to use it to develop a completely new area of operations. The market for data transmission between Europe and the Middle East is growing by about 30% year-on-year, so supply must keep up with demand. Today, the main creators of this market are global giants such as Meta, Google and Amazon, and any of them could be our potential client - explains Artur Jastrząb, Member of the Management Board and CFO, Mennica Polska S.A.

Solid pillar of Mint of Poland's business

The analysis of prospects for long-term development of the telecoms industry, taking into consideration the know-how currently possessed by the Mint of Poland and the expertise of its Partners, will inform the process of building another solid business pillar within the Group.

The project will be financed from the Company's own resources as well as from external sources and funds raised from investors. Due to the implementation of the project, the Company's Management Board currently has no grounds to change the current dividend policy.