Rakon opens Chengdu factory on time

Rakon opens Chengdu factory on time

July 12 (BusinessDesk) – Rakon Ltd., the crystal timing devices manufacturer, has opened its US$35 million factory in Chengdu in western China on time.

The factory is a joint venture with leading quartz blank company Timemaker which holds 15% of the venture. Rakon managing director Brent Robinson said the new plant will provide significant extra capacity at lower cost.

“Our Chengdu plant is of strategic importance for our expansion in China and complements our first joint venture with Timemaker in Shenzhen and Chengdu,” he said in a statement.

The company said China currently accounts for more than 50% of its production and expanding its manufacturing capacity will help it fulfil the requirements of China's rapidly developing consumer market.

Rakon's crystals are used in both consumer-oriented GPS applications such as PNDs (personal navigation devices), smartphones and tablet devices as well as in telecommunications infrastructure.

Rakon said it plans to invest further over the next two years to meet expected demand and will have the capacity to produce up to 400 million units a year compared to its New Zealand factory's peak production of 180 million units a year.

Rakon shares are up one cent on yesterday at 98 cents. They have dropped from $1.27 in May after the company reported annual earnings below its own guidance.

It had forecast earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ended March would be between $25 million and $30 million but the result came in at $24.8 million.

(BusinessDesk)

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