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News from Asia-Pacific

Megan Responds to Optical Storage Demand

Data storage manufacturer Megan Media Holdings Berhad has pumped US$7.9 million into expanding its current operations to meet escalating global demand for optical storage products. According to industry analysts, worldwide demand for CD-R and DVD-R is expected to grow on a compounded rate of 16.5% and three-fold respectively in the next three years.

Megan Media's executive chairman Datuk Dr Mohd Adam Che Harun said that the global demand for DVDs will go up exponentially in the coming years as prices of DVD players gradually drop. Coupled with a growing computer-savvy public equipping themselves with sophisticated storage media, Adam is confident of gaining a larger slice of the data storage market.

"The export market for CD-Rs and DVD-Rs has grown steadily over the last two years, but we were unable to capitalize on opportunities due to our limited manufacturing facility and small production capacity," he said.

The company grew its production capacity from 1.5 million in 2000 to 5.5 million CD-R and DVD-R a month last October and plans to increase it to 7.5 million a month with the set-up of two more new production lines by April.

Of the investment, US$3.1 million will be used to build a new factory to expand monthly production capacity to 20.5 million pieces on a gradual basis. The remaining US$4.8 million is for the purchase of two new machines.

Global Ties

Megan began the manufacture of optical storage products in 1999. It produces a line of data storage products for the domestic market under its own brand, Memory. The company's main revenue comes from contract or original equipment manufacturing for brands from companies such as BASF, Samsung, LG, Grundig, Mitsubishi, JVC and IBM.

About 90% of Megan's products are exported, of which 35% goes to the European Union, 35% to the US, and the remainder to Japan, Korea and Singapore. Principal overseas customers include Europe Multimedia Ltd, Cantech Magnetics Inc, Akane Bussan Co Ltd, MJC (S) Pte Ltd and Mediatech Co Ltd.

Adam added that he was also confident of securing contracts from two leading Japanese firms for the production of CD-Rs and DVD-Rs, as Megan utilizes Japanese technology for its production activities. The company is also making a move into the China market with a recent memorandum of understanding signed with Beidaihe Qinhuandao Xingyuan Science Development Co Ltd to jointly undertake the manufacturing and distribution of data storage products.

by Anita Devasahayam

(March 2003 Issue, Nikkei Electronics Asia)

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