Astral Communications Inc. plans to exit the compact disc market by putting its Boca Raton, Fla., plant up for sale.
The Montreal firm opened the CD facility in early 1994 and expanded it to a six production-line operation capable of making 20 million to 24 million CDs a year. Astral hoped to make digital movie video discs at the facility but this market is developing slowly. Instead, Astral lost money as a small player in the competitive music CD market.
Astral's vice president of finance, Claude Gagnon, said by telephone that his firm wants to sell the Boca Raton operation as soon as possible and that ``there has been some level of interest'' among undisclosed firms.
Astral will focus on its broadcasting, videocassette wholesaling, technical services and content creation. Boca Raton's equipment includes Toolex Alpha injection presses and a full mastering operation.
Gagnon said Astral took a one-time charge of C$25.9 million (US$18.8 million) on the facility for its fiscal year ended Aug. 31. The charge includes past operating losses, provisions for future losses and a write-down on the initial investment.
Astral officials said last spring that they were looking for a strategic partner for the Boca Raton operation but they would consider selling it if no partner were found.
Gagnon said the music CD industry is plagued by overcapacity except for producers in special market niches.
About a month ago Quixote Corp. of Chicago said it plans to get out of the compact disc market by selling its Disc Manufacturing Inc. subsidiary to Cinram Ltd. of Toronto.
Some optical disc producers, including Pioneer Video Manufacturing Inc. and Americ Disc, are expanding, but most of their new capacity is aimed at growing CD-ROM and digital versatile disc markets.