Blu-ray Plant Expansion in Indiana Nearing Completion

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Researched by Industrial Info Resources (Sugar Land, Texas)-- Sony Corporation (NYSE:SNE) (Tokyo, Japan) subsidiary Digital Audio Disc Corporation (DADC) (Terre Haute, Indiana) is nearing completion of an expansion project at its production plant in Terre Haute. The plant, which began producing Blu-ray discs in May 2006, has been undergoing a major expansion since early 2007. Blu-ray discs are used for PlayStation 3 video games and high-definition-format movies.

DADC began work on a $16.2 million, 57,000-square-foot building expansion in early second quarter of 2007. The building has been completed, and DADC is now in the process of installing new equipment and retooling existing equipment to expand Blu-ray disc production. The company is spending $59.6 million on plant's interior, including 130 replicating and 40 packaging lines. The expansion will take production capacity up to 5 million 25- and 50-gigabyte Blu-ray discs per month, up from its present 750,000 discs per month produced on three replication lines. Currently, the plant produces almost 76 million DVD, Blu-ray, CD and UMD discs per month.

The company utilized the services of its on-site contractor, Industrial Outsource Solutions, for all of its recent expansions. The electrical subcontractor is Evan & Ryan Electrical Contractors (Terre Haute), and mechanical construction is being handled by Freitag-Weinhardt Incorporated (Terre Haute). DADC expects to complete this project by mid-summer 2008.

When the plant was opened in 1983, it cost $21 million and had a production capacity of 300,000 compact discs per month. This is DADC's third major expansion in recent years; in 2006 the company invested $91 million on a 90,000-square-foot expansion, which was the beginning of Blu-ray disc production in Indiana. The year before that, DADC added a 46,000-square-foot expansion to add production of the universal media disc (UMD) which is used in the Sony PlayStation Portable system.

The latest expansion appears to be a wise move since Blu-ray recently became the format of choice over HD DVD as Toshiba, one of the main companies to design the HD DVD format, decided to abandon it. The format war between the two was a repeat of VHS versus Betamax in the late 1970s, which Sony lost. Sony operates two disc manufacturing plants in the United States: Terre Haute and Pitman, New Jersey. Terre Haute is the only plant in the U.S. with Blu-ray production capabilities and only one of three plants worldwide.

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