Rakon triples capacity with new Chinese plant

Staff manufacturing components at Rakon's Auckland plant. Photo / Martin Sykes

Kiwi tech firm Rakon is on track to open a new facility in China this year as the worldwide demand for its products continues to grow.

Rakon manufactures crystal oscillators, which are used in the circuitry and GPS components of devices such as smartphones and tablet computers.

Given the growing popularity of these devices, Rakon's goods are hot property in technology markets and the expansion in China will help the company meet this demand.

"The China facility has been planned for quite some time to deal with [the growing market] and will it will give us the cost and capacity base we need to be successful in profitably supplying this sector," said Rakon's managing director Brent Robinson.

The facility, based in the south-west city of Chengdu, will produce 30 million crystals a month, which is double what Rakon builds at its Auckland plant.

According to the company, US$45 million is being invested into the project and extra capital is planned over the next two years.

The move into China extends Rakon's global presence and adds to the plants in England, France and India.

"Over the past twelve months we have increased capacity in New Zealand and the UK and late last year we also expanded into a second factory in India to cope with the increase in demand for our products in the telecom infrastructure market," Robinson said.

The growth builds on a $5.6 million after-tax profit which the firm posted last year in the six-months to September.

This was a sharp turn around from 2009/2010 financial year, where it recorded a $5.4 million loss.

Rakon's shares rose 4 per cent to $1.05 in trading yesterday, and have dropped 17 per cent this year. The stock is rated 'outperform' in a Reuters survey of five analysts, who are picking Rakon to post full-year earnings of 5.7 cents a share in the year ending March 31, compared to a loss of 3.3 cents a year earlier.

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