Japan“s Hoya Corp. has been granted a license by the Vietnamese government to produce glass discs in Hanoi“s Thang Long Industrial Park. The new plant will help to meet the growing demand for glass …
Japan“s Hoya Corp. has been granted a license by the Vietnamese government to produce glass discs in Hanoi“s Thang Long Industrial Park. The new plant will help to meet the growing demand for glass discs in computer hard drives and smaller drives like that of the Apple iPod. Under the license awarded 11 November 2004 by the Vietnamese Ministry of Planning and Investment, the Japanese company will set up a subsidiary called Vietnam Hoya Glass Disk Ltd. and build a plant at the industrial park in Dong Anh District. According to a ministry source, the factory will be built in three stages, with the first costing about USD 45 million. At Hoya“s request, he did not disclose further financial or production details, saying only that the total investment would be “huge” and that all output would go for export. The Ministry of Science and Technology has classified the project as hi-tech, making it eligible for greater investment incentives than projects in other areas. Glass discs are mainly used to store data in PC hard drives, but their use in portable music players such as the Apple iPod is also pushing demand, and a new source of demand is expected to emerge when drives go into mobile phones. It was reported by Reuters that Hoya plans to bring the plant on-line in December 2005 and that the half foreign-owned company is one of Japan“s most profitable. Reuters also reported that Hoya chose Vietnam because it can secure a quality workforce and have access to a good water supply. Hoya has around 75% of the global market for glass discs for 2.5-inch hard drives and 100% for the one-inch variety found in the iPod. “Basically this is a positive move”, Credit Suisse First Boston analyst Kunihiko Kanno told Reuters. “They have been boosting capacity but not enough to keep up with demand. Moreover, the investment amount doesn“t strike me as being all that high”. Kanno views the memory disc business as a major profit driver for Hoya, projecting glass disc sales to grow about 80% year-on-year in the business year to March 2005, followed by 20% and 18% in the following two years. Reuters added that Hoya acquired Nippon Sheet Glass Co.“s glass disc business in 2003 to give it a commanding share of the 2.5-inch category. Currently it has no competitors in the one-inch sector, although Kanno notes that Konica Minolta Holdings and others may enter this lucrative field.