Maxell And Nippon Columbia To Combine U.S. Dvd Manufacturing Facilities New Joint Venture Will Benefit From Fast-Growing Dvd Market
August, 9 2002
New York- August 9, 2002 - Nippon Columbia and Maxell Corporation of America (Maxell) today announced a Letter of Intent to create a joint venture company merging their respective U.S. DVD manufacturing operations. The joint venture will combine Maxell Disc Replication Services and Nippon Columbia’s DENON Digital LLC (DDL) disc replication subsidiary. The new entity, which will be called MD Digital Manufacturing LLC, will be centered at DDL’s manufacturing facility in Madison, Georgia. All of the DVD manufacturing equipment previously operated by MCA Maxell in San Diego, CA, will be transferred to that location. DDL will provide exclusive sales and marketing support. MCA will own 60% of the joint venture company, and DDL 40%.
The new company will create a combined DVD manufacturing capacity of over 30 million discs annually and provide such additional services as offset disc printing and automatic packaging for DVD cases.
"The economies of scale and consolidation benefits this merger will deliver are increasingly imperative to the disc replication industry," said Tom Yamakawa Maxell's U.S. President. "Our relationship as sister companies in the larger Hitachi family made this combination a natural fit. And in this ‘just-in-time’ business, DDL's manufacturing location outside of Atlanta will make the joint venture more logistically attractive to major national users of pre-recorded disc media."
"DVD market demand is exploding globally," said Nippon Columbia Chairman Strauss Zelnick. "Combining DDL’s strength in the CD manufacturing business with MCA Maxell’s resources and experience in DVDs will position us to capitalize aggressively on this growth opportunity. We intend to continue to strengthen Nippon Columbia’s position in all areas in which we compete."
DDL is a wholly owned subsidiary of Nippon Columbia, a diversified music, entertainment, and digital media manufacturing company with assets in both the U.S. and Japan. Nippon Columbia is lead by veteran music executives Strauss Zelnick, Chairman, and Jack Matsumura, President and CEO. Brian Wilson is President & Chief Operating Officer of DDL. Major shareholders of Nippon Columbia include Hitachi, Mitsubishi, and Ripplewood Holdings.
Maxell Corporation of America, a wholly owned subsidiary of Hitachi Maxell Ltd., is a leading full-line manufacturer of digital and analog media products for audio, video and camcorder applications, accessories and headphones, computer storage media, batteries and professional audio and video media.
The transaction is expected to close in mid-August, and facilities integration is scheduled for completion by November 1. The companies anticipate no service interruptions to existing customers.