For immediate release 14 January 2008 Arasor update on ZTE International Joint Venture
Arasor International Ltd. (ARR.ASX) has completed the initial set up of its previously announced joint venture (JV) in Tianjin Province (China) with ZTE International (ZTEI).
It should also be noted that the JV is with ZTEI and not ZTE Corporation (ZTE, HKSE 0763) as previously announced to the market. ZTEI and ZTE Corporation are two separate entities.
Both Arasor and ZTEI are happy with the immediate progress and the JV has commenced operations via: - initial strategic and execution teams formed - ground breaking and commencement of construction of new JV premises attended by state and international media - initial funding received - initial contracts received from customers
Arasor and ZTE International have established the joint venture to commercialise a wide range of laser based display applications including televisions, projectors and cellular phone applications.
Importantly, Arasor and ZTEI have also secured the strategic support of the China Development Bank to provide large scale financing for the JV up to USD$300million under Phase 1 extending to 2010. In addition, the Arasor/ZTEI JV will give Arasor higher visibility and control over the direction of the laser display value chain and the evolution of the industry.
“It leverages the combination of ZTEI’s global reach, Arasor’s core laser display technologies, and the financial strength of the China Development Bank to propel the acceptance of state of the art laser display applications on a world wide basis” said Yong Yu, Chairman of ZTE International.
Dr. Simon Cao, CEO of Arasor, states “given our recent growth in the telecommunications sector, we are excited to now be at the forefront of the laser projection and display industry particularly as we now control the supply chain in manufacturing laser light sources. Our partners provide us the platform to become a global leader in this space,” he concluded.
Laser technology will be at the heart of next generation lighting sources that will provide consumers with a full range of benefits including access to enhanced spectrum of colors, significantly lower power consumption, smaller sizes and overall product cost savings. The Arasor/ZTEI joint venture will be the first entity in the world solely dedicated to the global deployment of applications based on laser display technology.
By the end of Phase 1, production volumes are intended to reach an annualised rate of 6 million laser sources and 2.4million light engines. A laser source requires 3 PPLN optical chips as well as 3 laser chips.
With the recently announced acquisition of Novalux, Arasor has control of the value chain, path to market and significant external capacity to finance the growth of the laser display market well into the next decade. This acquisition underpins Arasor’s business strategy as it now means the company can control the growth of the sector, limit competition and margin pressure while doubling revenue potential from higher margin products.
The lasers are a platform technology for a variety of display products. These will include laser TVs for the home, miniature projectors embedded in your mobile phone, high power versions used for digital cinemas, lower power versions used for transportable pocket-sized projectors, and even head-up displays for automobiles.
The financial impacts of the Arasor/ZTEI joint venture have not been incorporated into Arasor’s 2008 forecast.
