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

 

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news