Partners GTC Transcontinental Group Ltd. of Montreal and Moulage Plastique de l'Quest SA of France opened a disc manufacturing plant in Modesto, Calif. The 100,000-square-foot facility houses Americ Disc, a subsidiary of the Montreal-based Disc Americ, which manufactures audio CDs, CD-ROM and digital versatile discs. The facility puts Americ Disc near its West Coast customers, and will focus primarily on the production of CD-ROMs, said Dennis Herrick, vice president of U.S. operations.
According to a published report, the company invested C$25 million (US$18.2 million), although company officials would not confirm that figure.
The plant will have the capacity to produce 40 million discs annually using 13 Netstal injection molding presses. Six of those presses are new Netstal Discjet molding machines, with the balance being 2-year-old Netstal equipment. Herrick said there is room for expansion.
Americ Disc also operates two laser beam recorders, one of which is prepared for the production of DVDs, a market that company officials call promising.
Americ Disc also has CD manufacturing plants in Drummondville, Quebec, and Miami, giving the company the capacity to produce more that 225 million discs annually. Americ Disc also has a distribution center in Minneapolis and a network of 10 regional sales offices in North America. The company employs more than 1,100.
Herrick explained that Disc Americ has its origins in manufacturing vinyl records during the 1950s. The company since has become one of the largest privately held disc manufacturers in the world, with production plants in France, Spain, Thailand and Ireland. Its 1996 worldwide production capacity exceeded 450 million units.
Pierre Francou, vice president of technology for Disc Americ in Montreal, said current market conditions show ``very strong competition'' and the selling price for audio CD is moving downward.
``Business is a little flat,'' he said. ``That's due to the fact that [the CD industry] now has 17 different [CD production] plants in North America alone, so the capabilities of production have been increasing in volume more than the market needs,'' Francou said.
However, he added that CD-ROM business is increasing, which takes up the slack in the declining audio CD demand.
Francou said he believes the industry is ``probably not far from reorganization,'' in which consolidation will absorb weaker competitors.
``We're starting to see some big moves and consolidation of this industry, and Americ Disc wants to be a part of this reorganization as a strong company expanding market share,'' he said.