Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Rakon on track to triple capacity with Chinese facility

Rakon on track to triple capacity with Chinese facility

By Paul McBeth

March 30 (BusinessDesk) – Rakon Ltd., which manufactures crystal oscillators used in navigation systems and smart phones, is on track to triple production when its new Chinese factory comes on line in July.

The Auckland-based company will boost production capacity by 30 million crystals a month when the Chengdu facility opens, on top of the 15 million frequency control products made in New Zealand, it said in a statement. Rakon is targeting high-end wireless products, such as smart phones and tablet devices, and is looking to gain fatter margins at the new facility in the fastest-growing part of the world.

“We’ve had significant success in recent times in increasing our market share in what is a highly competitive and growing market,” managing director Brent Robinson said. “The China facility has been planned for quite some time to deal with this, and it will give us the cost and capacity base we need to be successful in profitably supplying this sector.”

In 2009, the components manufacturer tapped investors for $86 million to expand its Chinese manufacturing operations and boost the volume of its production while reducing the cost of doing so. About $30 million went into the first construction stage of a new factory with joint venture partner Timemaker, with additional funds used to pay down debt.

Robinson said the increased use of wireless devices is putting pressure on telecommunications networks to meet data demand, and that’s helping drive investment in transmission infrastructure and boosting demand for Rakon’s products.

“Over the past 12 months we have increased capacity in New Zealand and the U.K. and late last year we also expanded into a second factory in India to cope with the increase in demand for our products,” he said. “We are predicting further increases in volume over the next 12 months.”

The global financial crisis in 2008 put the Chinese expansion on hold, forcing Rakon to reassess its investment, and shift the location of its Asian manufacturing base.

Rakon’s shares rose 4% to $1.05 in trading yesterday, and have dropped 17% this year. The stock is rated ‘outperform’ in a Reuters survey of five analysts, who are picking Rakon to post full-year earnings of 5.7 cents a share in the year ending March 31, compared to a loss of 3.3 cents a year earlier.

The crystal manufacturer returned to profit with earnings of $5.6 million in the six months ended Sept. 30.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Science Awards: NZAS Celebrate NZ Scientific Achievements

The Marsden Medal is awarded for a lifetime of outstanding service to the cause or profession of science, in recognition of service rendered to the cause or profession of science in the widest connotation of the phrase. This year’s medal is awarded to Dr Mike Andrews. More>>


Court Rules: Affco 'Unlawfully' Locked Out Meat Workers

The note says the full court found for the plaintiffs, "that is that the defendant locked out the second plaintiffs unlawfully and that it breached s 32 of the Act by acting otherwise than in good faith towards the plaintiffs while collective bargaining was still going on." More>>


New Bill Introduced: GST On Online Services

These measures are an important first step in the Government’s efforts to deal with increasing volumes of online services and other intangibles purchased from overseas suppliers that should, under New Zealand’s tax rules, be subject to GST. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news