Optical media powerhouse Technicolor/Nimbus is closing a plant and adding domestic capacity to replicate 225 million compact discs and 52 million digital versatile discs annually.
The merged operations shut an 84,000-square-foot Nimbus plant in Provo, Utah, on May 10, as part of a consolidation of Technicolor and Nimbus International Inc. facilities on the East and West coasts. The plant employed 155.
By mid-July, Provo production will be relocated to Camarillo, Calif., Nimbus' Robert Headrick said by telephone from Ruckersville, Va. Headrick is executive vice president of optical media sales and marketing with Nimbus CD International, now a unit of Technicolor's optical disc division.
To boost CD and DVD capacity, Technicolor/Nimbus is adding injection molding lines and warehouse space in Camarillo and Ruckersville. Total annual capacities had been at 200 million CDs and 40 million DVDs.
London-based Carlton Communications plc acquired Nimbus on Sept. 1 and assigned key executive Lanny Raimondo to oversee the combination of Nimbus' optical media assets with Technicolor's emerging CD and DVD business. Technicolor's strength historically is in videocassettes.
B. Quentin Lilly guides Technicolor's manufacturing functions, and Lyndon Faulkner heads the Nimbus operation, which also includes optical disc work in Cwmbran, Wales, and Foetz, Luxembourg. Both Lilly and Faulkner report to Raimondo.
Once Provo's 21 molding lines are moved, Technicolor/Nimbus will end up with 26 CD lines and five DVD lines in Camarillo, Headrick said. The Virginia plant will have 19 CD lines and eight DVD lines. Both locations provide data pre-mastering services for CDs and DVDs.
``We are broadening offerings with disc packaging,'' he noted.
Moving the Utah operation and some management to California and other growth required floor-plan adjustments and quick construction of a 500,000-square-foot addition, now under way in Camarillo.
The 120,000-square-foot Virginia facility will face its capacity test after September once new equipment is operational. ``We are getting close to physical capacity,'' Headrick said.
Headrick was enthusiastic about DVDs. He noted a strong increase in titles hitting the market, larger wholesale DVD video orders and some evidence of graphics-heavy DVD-ROM game activity for the 1999 holiday season, possibly tempering the release of CD-ROM titles.
The vertical business-to-business market for costly software programs is beginning to notice DVD-ROM's potential. This niche may supply a $40 CD drive with a high-margin CD-ROM.
The practice will extend to the newer format as DVD drives come down in price, Headrick said.
``The higher the margin on the business software, the easier it is to give away a DVD drive.''
Packaging and distribution services operate in Memphis, Tenn.; Livonia, Mich.; and Camarillo.