Norway’s SafetyCable Eyes Lucrative US Market

sept 20, 2000   //   by admin   //   Ukategorisert  //  No Comments

By Ingrid Williams
07/10/2000 Dow Jones International News
(Copyright (c) 2000, Dow Jones & Company, Inc.)

OSLO -(Dow Jones)- The theft of high-tech products and components is estimated to cost around $5 billion a year in the U.S. alone, so it’s no wonder Norway’s SafetyCable AS has set its sights on growth overseas.

The young computer security firm, already forecasting strong sales growth in Scandinavia, is to set up in the U.S. by early next year and launch a raft of new products.

Chief Executive Knut Foseide said SafetyCable is undervalued at home, so such plans should help raise interest. There again, its ambitions far outstrip the Norwegian market.

«Norway is a very little market for our products commercially,» Foseide told Dow Jones Newswires in a recent interview. «We consider the U.S. to be our main market…Our vision is to place ourselves among the leading companies in physical and digital securing of networks and Internet installations.»

Foseide will venture to Silicon Valley later this month to oversee the establishment of a U.S. research and customer support office.

«We will build a larger organization,» Foseide said. «There, we will be positioned within the main network for information technology resources. We have contacts there already, and there are potential companies for partnerships.»

The company, founded in 1998, raised about $1 million through a private share placement in March to fund production and marketing in Norway. It aims to raise between $1 million and $3 million in the autumn, also through a private placement, for product launches.

Its first product, available in Scandinavia, is a power cord that has a surge protector and an alarm activated by any attempt to unplug the computer without using a password. SafetyCable has an order backlog in Scandinavia for 12,000 units.

The new products will target the vast potential of the U.S. market, Foseide added.

«We are introducing two new cable models, and a complete e-business solution that includes accounting and logistics that can be linked up with the web,» Foseide said. «Also a digital security system.

«Our main challenge right now is to establish high-volume production to meet the (demand) in the market.

«It’s a bit of a crisis now in micro-controllers, with Pokemon and other game producers sucking them all up. We need micro-controllers. We have a delay due to that.»

International Distribution Deal

Foseide said he expects the new products to go a long way toward lifting SafetyCable ‘s share price. It trades on Oslo’s gray market at about 44 kroner ($1=NOK8.6120) a share, valuing the company at about NOK40 million.
«I think that’s really low, especially when you consider the new products we have under development,» he said. «But we have to blame ourselves for too little information to the market. Once there is more information on our products, then we will be one of the most in-demand companies in the gray market here.»

The gray market consists of trading in the securities of companies that are unlisted, also known as over-the-counter trading.

Foseide said the shares could also receive a boost in about a month when the company unveils a deal with a «large international investment company for distribution. The company has also bought shares in SafetyCable .»

Foseide holds about 49% of SafetyCable shares, and there are more than 80 shareholders, including the company’s nine employees.

«If it were not for the new products, we would not do another share issue,» Foseide added.

«We are being very cautious. We have seen a lot of companies hurt because they expanded too fast on the international market.»

The company still has between $600,000 and $700,000 in cash left from the March share placement, and has prepaid for the production of 7,000 SafetyCable units, he said.

Foseide said a conservative estimate of sales in Scandinavia for the July 2000 to July 2001 period is about NOK20 million, and predicts a 20% rise in annual sales.

Foseide, a graduate psychology studies dropout, may be new to the industry, but he has the backing of industry veteran Lars Monrad Krohn, the company’s chairman. Krohn is credited with founding Norsk Data, one of Norway’s most well-known tech companies, and Mycron and Tiki Data.

Company Web site: www. safetycable.no

-By Ingrid Williams, Dow Jones Newswires; 47 23 25 70 70; ingrid.williams@dowjones.com

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