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Technicolor closes plants in Europe and the US

Technicolor Home Entertainment Services has closed facilities in Cwmbran (Wales), Luxembourg and Pinckneyville (Illinois, USA) "as a result of changed market conditions and the ongoing maturity of standard definition DVDs," according to a company statement.

French parent company Thomson said production would continue at its plant in Poland, reported to be five times less expensive to run than the Welsh site. The loss of a contract with Universal Studios to German replicator Optical Disc Service late last year is thought to have been a major setback.

The Llantarnam-based plant, with a production capacity of 225,000 DVDs a day, closes with a loss of 310 jobs. The closure of the Luxembourg plant, with a daily production of 166,000 discs, will result in the loss of 210 jobs.

The company statement says, "Thomson believes these actions will strengthen global business activities, directly address ongoing pricing pressures associated with the home entertainment sector, and generate operating efficiencies that will enhance Technicolor's long-term competitiveness while allowing the company to continue to provide market-leading manufacturing and distribution services to its customers.

"As a consequence of this restructuring initiative, Thomson's intention in Europe is to cease DVD and CD manufacturing operations at its factories in Cwmbran and in Luxembourg. The exact date of closure is subject to completion of the consultation process with employees. Technicolor will maintain DVD and CD replication and packaging operations at its existing manufacturing facilities in Piaseczno in Poland." The Polish plant has a pressing capacity of some 1.3 million DVDs a day.

Thomson is scaling down Technicolor's operations in the US as well. Doors were locked at the huge Technicolor-Universal Media Services at Pinckneyville (Illinois) Wednesday morning as 440 employees were sent home after the replicator closed down the plant. It follows the layoff of 220 packaging employees last year. Production will ceased at the end of March.

"Technicolor has announced a restructuring program that will impact several North American sites,” said company spokesman Tom Bracken. While some packaging and distribution jobs are being moved to plants in Canada, Tennessee and Michigan, manufacturing will be centralized in the company's existing location in Guadalajara, Mexico.

Manufacturing at Technicolor's principal location in Camarillo, California, will be "significantly" scaled back, impacting some 640 staff. A future 70 positions in the Memphis plant will be axed.

“The reduced growth rate of the DVD business as well as ongoing customer demand for lower pricing has essentially forced us to consolidate to our primary locations,” Bracken said.

Technicolor, which Thomson acquired from Carlton Communications plc in 2001 for $2.1bn, has a global production capacity of 1.5 billion DVDs a year. Clients include Paramount, Twentieth Century Fox and The Walt Disney Company.

Story filed 18.01.07

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