Prodisk's Ningbo CD-R disk plant to start mass production in Q1, 2004

Dec 15, 2003 Ι Industry In-Focus Ι Electronics and Computers Ι By Quincy, CENS
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Taipei, Dec. 15, 2003 (CENS)—Taiwan's Prodisc Technology Inc. recently said its new plant in Ningbo, Jiangsu Province, mainland China would begin mass production with 30 compact disc-recordable (CD-R) disk production lines in the first quarter next year.

Prodisk is the No. 3 optical disk maker in Taiwan. With Prodisk's new plant in Ningbo, all of the top-three optical disk makers in Taiwan, including the No.1 Ritek Corp. and No. 2 CMC Magnetics Corp., have set up production bases in coastal cities of southeast mainland China.

Ritek currently runs an optical disk plant in Kunshan, Jiangsu Province, mainland China, with its monthly capacity to be expanded to 40 million disks soon. CMS's disk plant in Shanghai currently has a monthly capacity of about 30 million disks and the volume is under expansion. According to CMC, it plans to funnel all of the profits generated from the mainland plant into setting up another 20 disk production lines at the mainland facility next year.

The prices of CD-R disks have gradually rebounded to reasonable levels and render an about 30% profit margin for makers, after an excessive supply in the past one year. Though the optical disk industry has evolved into a mature line and the supply already runs close to the demand, most makers think that the CD-R disk business will still have a room for growth in the coming few years and can generate profits if the prices are maintained at stable levels.

Prodisk said that it decided to set up the new disk plant in Ningbo mainly in consideration of the relatively-high costs of production expansion in Taiwan and rear-section printing and packaging works requiring big-volume labor. With matured management models and electronic operation mode, Prodisk chose to locate the its mainland plant in Ningbo and expects to reach the highest production efficiency at the lowest costs.

According to Prodisk, its new Ningbo plant is located in a tax-bonded zone near the Beilum Port and enjoys the most open and preferential economic policies there. Prodisk president Hsu Rong-liang said that the new mainland disk plant would have a monthly capacity of 30 million disks in the initial stage and the volume would be continuously expanded to 60 million disks in the future. At the new facility, Hsu added, Prodisk does not rule out the possibility of installing production lines also for digital versatile disc (DVD)-R disks and/or other optical components.

Compared with the plants set up by local counterparts in processing export zones in mainland China, Hsu claimed that Prodisk's new tax-bonded plant can not only export its products but can also pay only a 2% raw material tax for the domestic sales with the company's Smart Buy brand in mainland China. The president also added that the mainland plant was set up also to avoid the anti-dumping taxes levied by the European Union on imports of optical disks.
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