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.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news