History 2005: Ritek Transfers European CD-R Facilities to Vietnam

Ritek has decided to transfer all its European CD-R manufacturing equipment from Europe to Vietnam.

The company had four CD-R facilities in Europe: Primedisc Technologies (founded with Philips, which holds 30%) and RME Manufacturing in Germany, as well as Multimedia Info-tech and Rimedia (or Roxell) in Northern Ireland.

The value of the material transferred to its Vietnamese subsidiary, Score High Group, the 100% owner of Ritek Vietnam, will be $57 million.

The manufacture of writable optical disks, especially low-cost CD-Rs is no longer cost-effective, due to the elevated cost of labor, despite the advantages of evading import duties imposed by the European Community.

Another way to avoid them, then, is to manufacture them in countries not yet subject to these duties with low wages, as is the case in Vietnam.

Ritek would have preferred to transfer production to China, but that country does not allow used line equipment to be imported.

This article is an abstract of news published on issue 209 on June 2005 from the former paper version of Computer Data  Storage Newsletter.