REL: 0859 HRS Rakon Limited
JOINTV: RAK: Rakon announces Joint Venture in China
Rakon Limited has successfully completed the next step in establishing its
planned facility in China by confirming its Joint Venture (JV) agreement with
the owners of Chinese based Timemaker Crystal Technology Limited (Timemaker).
Rakon will hold a 70% share in the JV and will also take a 40% share in
"We explored a number of different options to expand Rakon's manufacturing
capability in China and determined that partnering with Timemaker was the
best means of establishing a successful facility," said Brent Robinson, Rakon
Timemaker is the world's leading manufacturer of high specification quartz
crystal blanks, which is the key component in crystal resonators. Production
of these blanks is technically demanding and labour intensive. High
specification quartz crystal resonators and oscillators are dependent on the
quality of the crystal blank.
"Although we maintain the capability to manufacture our own quartz blanks in
Auckland we have been outsourcing the manufacturing of our high volume
production for many years," said Mr. Robinson.
"Timemaker has been our preferred partner for this because of their
exceptional quality and professionalism, which makes them a good match for
Rakon. With Timemaker we have a partner on the ground in China who knows the
industry and technology, which is a huge benefit. Our investment in
Timemaker also allows us to take greater control of our overall supply
chain," added Mr. Robinson.
Plans for the Chinese operations are at an advanced stage and Rakon expects
to begin construction in the fourth quarter of this year with production to
commence in late 2009. The Chinese facility will focus on manufacturing
quartz crystals resonators and Temperature Compensated Crystal Oscillators
(TCXOs) for high-end and high-volume consumer applications, including the
rapidly emerging GPS cellular phone market. Timemaker will continue to focus
on supply high specification quartz blanks to its global customer base.
Mr. Robinson went on to say, "China is the centre for manufacturing consumer
electronics and we expect significant growth there in the coming years as
mobile phones, GPS and other applications become even more prolific."
"Having a presence in China will give us greater access to this market,
putting us on the doorstep of our customers. We will also be better
positioned with opportunities to supply into products destined for one of the
world's largest growing consumer markets."
Over the next five years Rakon plans to invest between 45 and 70 million New
Zealand dollars in China to meet market growth; the actual timing and amount
of investment will depend on the speed of market growth and Rakon's success
in capturing it.
Rakon remains committed to its New Zealand manufacturing base and stressed
that its move into China was not a move out of New Zealand.
"We have recently expanded our Auckland manufacturing plant to allow us to
accommodate the growth we have been experiencing. The instalment of a fifth
crystal line in our clean room and the commissioning of our next generation
TCXO test system are significant investments in our future here," said Mr.
He added, "Our facility in Auckland will continue to develop as a centre for
innovation and development and will spearhead the manufacturing of new
products and technology."
Rakon currently employs 500 people in Auckland and a total of 900 globally
with manufacturing plants in the United Kingdom, France and India. Rakon
also maintains 12 applications and customer support offices through Asia,
Europe and North America.
End CA:00167484 For:RAK Type:JOINTV Time:2008-07-17:08:59:34