Less than five years ago, few could have imagined the modern manufacturing behemoth that would rise out of the flat, dusty farmlands of Noida, an eastern New Delhi suburb. Today, the 100-acre tract that belongs to Moser Baer India Ltd. is home to one of the world's largest optical-media production sites.
Representing a total investment so far of well over $600 million, the massive site has more than 1.76 million square feet under roof and features what company officials call - at more than 1,300 feet - the longest building façade in Asia.
The gleaming plant processes more than 154 million pounds per year of polycarbonate and polystyrene resin. It turns out various formats of CDs and DVDs in Class 100 clean room conditions, as well as jewel boxes and cake boxes - the round, spindled plastic packages that can hold as many as 100 blank discs.
After a recent $105 million investment, the site accounts for half the company's annual production capacity of 2.8 billion optical discs per year, according to Jagjit Singh Singha, an Indian Army colonel who is senior manager of administration and security at the plant. The latest investment was targeted entirely at boosting DVD output.
The Noida site has its own 40-megawatt power plant and six resin silos with a centralized conveying system. Despite being highly automated, the site employs about 5,000 full- and part-time workers. Although the optical media operations are automated, the packaging operations require manual work.
``We've recruited and trained over 2,000 people in the last 12 months,'' boosting full- and part-time employment companywide to about 7,500, Singha said in a Feb. 17 interview at the plant. In total, Moser Baer runs more than 500 injection presses. And the output can be mind-boggling.
``In one day, we dispatched 25 million discs, in 46 containers, from this plant alone,'' he added.
Singha said Moser Baer began construction on the Noida plant in September 2001 and was producing jewel boxes within six months. That first phase put just more than 1 million square feet under roof and involved an investment of $375 million. Phase two, which cost another $200 million, began in October 2003 and was completed by the following May. Several phases later, the company anticipates completing its latest expansion by July.
Begun in 1983 as a joint venture, Moser Baer subsequently bought out its Swiss partner and now operates five plants in India. The public firm claims to be the world's second-largest optical disc maker, with its closest rivals being two Taiwanese firms - CMC Magnetics Corp. and Ritek Corp.
A quick tour of the jewel-box plant revealed a pristine facility running 53 all-electric JSW injection presses, all with 309 tons of clamping force. The facility runs 39 presses for jewel boxes, nine for cake boxes and five for floppy disks. Most of the Yushin robots and auxiliary equipment are from Japan.
Plant manager Ravi Thazhakkote said all the presses are running eight-cavity molds - four lids and four bottoms each - on cycles of 4.6-5.1 seconds. Each day the plant consumes about 220,000 pounds of resin and produces 2.2 million jewel boxes. It uses PS for the jewel boxes and polypropylene for the cake boxes. Workers let the jewel box components cool for 12 hours before palletizing them to prevent warpage, Ravi said.
The plant has a reject rate of less than 100 parts per million, Ravi said, and an electronic ticker above the plant floor lets workers track exactly how they're doing in real time, in terms of production goals, reject rates and several other parameters.
Next door, at the CD and DVD plant, one must don a head-to-toe ``bunny suit'' and pass through multiple ``air showers,'' enclosed chambers where pressurized air blasts off any contaminants, before entering the clean room production facility.
That plant features 41 highly automated lines producing blank, recordable CDs. Each line is fed by three injection presses, mostly 44-ton Netstals and JSWs, a plant official said.
In the adjacent DVD-R production area, the firm operates more than 100 automated production lines connected to Japanese and European injection molding presses. Many 55-ton Sumitomo presses were churning out blank, recordable DVDs. Moser Baer is the single-largest user of Netstal presses in the world, a Netstal official confirmed.
Moser Baer's processes have earned ISO 9001 and 14001 certification, Singha said, and production is fully integrated, from molding of the discs, jewel boxes and cake boxes, to the printing and final packaging.
``Moser Baer did come to the DVD-R/+R formats more latterly than some of its competitors ... but has invested significantly in very recent years and was one of the five largest replicators worldwide in 2005 in terms of DVD-R/+R output,'' said Jeremy Wills, a research consultant with Understanding & Solutions, a Dunstable, England, market research firm.
``Like some of its rivals, the company has held back from further investment in new DVD-R/+R capacity in 2006 until the markets can be assessed and there are signs of significant demand growth in all sectors,'' Wills said.
But it's clear the company is not holding back in other areas of investment. In a self-assessment of its ``weaknesses'' on its Web site, Moser Baer said it needs ``to scale up operations and evolve internal controls to meet exponential growth,'' and ``constantly expand capacities, requiring continuing capital investment.''
On March 31 the firm concluded its 2005-06 fiscal year, and in an April 27 financial statement, cited plans ``to further increase its annual optical media capacity to 3.2 billion discs at a cost of $75 million.'' It indicated that 30 percent of that planned increase is for next-generation formats, such as Blu-ray discs, high-definition DVD discs, and dual-layer discs. It plans to launch a series of such products beginning in the first quarter of fiscal 2007.
Moser's financial numbers reflect both the hammering the industry has taken in the past two years and the sector's recent improvement. In its fiscal year ended March 31, 2005, Moser's profit dove 82 percent from the previous year, due to soaring PC resin prices, high inventory levels and cutthroat market conditions. But things started to improve late in 2004, and the firm reported it shipped record volumes of product from October 2004 through March 2005.
In its 2005-06 fiscal year, ended just weeks ago, Moser reported a sharp increase in sales, up 29 percent to 17.3 billion rupees ($392 million). Profit in the fourth quarter rebounded marginally into the black, at 34.6 million rupees ($781,960) following a quarterly loss a year earlier of nearly 293 million rupees ($6.72 million).
For the full year, Moser eked out a pretax profit of 46.7 million rupees ($1.06 million), down 84 percent from fiscal 2004-05's profit of 296 million rupees ($6.61 million). Still, Executive Director Ratul Puri suggested that ``the global optical storage media industry is now on a steady path to recovery, driven by consolidation of capacity, continued growth in consumer demand and signs of softening of prices for key inputs.'' The latter comment refers specifically to PC resin prices. Moser said it ``expects substantial reductions in PC price'' in the second quarter of calendar 2006, which should help the company expand margins.
In a global market that in 2004 produced 14 billion discs valued at some $4 billion, Moser Baer claims a market share for recordable optical media of more than 16 percent. It is an original-equipment supplier to the 12 leading storage media brands in the world, and it exports about 80 percent of its output to 82 countries. Its stated goal is to capture a 20 percent market share worldwide. Tokyo's Techno Systems Research Co. Ltd. estimates that Moser is the world's largest maker of CDR/RW format discs and is No. 2 in DVD-R/RW formats.
The Indian firm also partners closely with Hewlett-Packard Corp., manufacturing and retailing HP's brand of CDs and DVDs in south Asia, and working with HP on new technologies such as high-storage-capacity Blu-ray discs and HP's LightScribe CD-Rs, which allow users to create professional labels inside the writer driver itself.
The company extended its global reach and U.S. presence three years ago via a joint venture and sourcing deal with Imation Corp.
Oakdale, Minn.-based Imation owns a 51 percent stake in the venture, which the two firms launched with an initial joint investment of about $10 million. Among other things, the deal allowed Moser to tap into Imation's global distribution network.
It launched its own ``moserbaerPRO'' brand in India in 2003 and now claims to command nearly a 40 percent share of that fast-growing market.
