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ODS insolvency saga latest: deals with Dicentia, Iberdisc

The 6 February official announcement by UK-based Spin Music Productions that it was to acquire the ODS Group turned out to be premature as news is coming that Danish replicator Dicentia A/S and ODS Business Services A/S have struck an agreement “to consolidate manufacturing and order administration for Nordic DVD and CD customers” with the intention “to examine the possibilities for enhancing cooperation between Dicentia and the ODS companies across Europe, especially to extend the product and service portfolio to the customers.”

Under the agreement Dicentia will manufacture and invoice orders from ODS Business Services’ customers. This is meant to be a “temporary arrangement” while the ODS Group and its manufacturing operations at Dassow, Germany, which are undergoing “radical change and restructuring,” can ensure for its customers “a safe and stable delivery through Dicentia.” Sales and key account management will continue to be separate entities for the time being.

The purpose for this cooperation is “to explore the opportunity to merge these two companies later” in order “to further the consolidation of the industry, which is driven by a very competitive environment in the Nordic region as well as in the rest of Europe.”

With head office in Copenhagen, Dicentia was founded in 2005 out of the merger of SDC DanDisc and DCM – and since February 2006 it includes Tocano/Toft & Fischer A/S – to become Scandinavia´s leading optical disc supplier, with footholds in Denmark, Sweden, Finland, Norway and Germany.

So what of Spin’s buy-out announcement earlier this month? The Dassow plant’s insolvency administrator seemed to have made it a condition for Spin to win the bid that it received cast-iron guarantees that a sub-contract deal had been struck with a major international replicator, with full financing in place. In the meantime, it requested Spin to withdraw its official announcement. If one goes by the latest Dicentia developments, it would thus appeared that the administrator’s condition was not met and the situation may be back to square one.

Indeed, on 20 February, Spin issued another press release announcing that, as a part of the ongoing process of forming the structure of the “new” ODS Group, Spin Music Productions Ltd. will be renamed ODS Manufacturing Group Ltd. (ODS MG).

The overall structure will contain two lines of business. The manufacturing line will be held by ODS MG as the legal entity for all CD, EcoDisc and DVD manufacturing activities in Europe and will also acquire the CD, EcoDisc and DVD manufacturing plant in Dassow. The Sales and Business Services line will be held by ODS Business Services Europe Ltd. (ODS BSE) and will amongst other services include Europe’s "most complete full service distribution network, covering 15 countries out of 6 distribution centres."

"It is the clear intention for the new ODS Group to bring these values – reliability, capacity, transparency, service – back to the company, by restructuring our business according to the professionally-developed Business Plan, by having a clear focus on our core business and by investing into new formats as Blu-ray and double-layer EcoDisc," says the company statement.

The other contender for the ODS acquisition, Dutch group MediaMotion, is no longer in the race. On Monday, the company’s board of directors filed for bankruptcy and an administrator was appointed by the court Tuesday.
The bankruptcy procedure relates to the group’s Uden-based production facilities, MediaMotion Manufacturing B.V. (Read separate story).

With every passing week without resolution, the fortune of Dassow plant's 1,100 employees is worsening. Some 433 workers have been moved to a “transfer company” financed to the tune of €3.1 million by the state of Mecklenburg-Western Pomerania for the next four months. Without new orders forthcoming, the 500 staff still employed will be out of work at the end of the month, the German press reports.

Indeed, DVD Intelligence understands that, at a closed meeting at ODS Dassow (convened after Spin's latest announcement), information was given that the plant will not be taken over and will be closed by end of the month.

The ODS manufacturing plant in Goleniow, Poland, has been acquired by Spain’s Iberdisc Optical Storage Solutions. The new owner, which is to resume operations shortly, says it aims to hire the majority of the 850 employees who lost their jobs in the insolvency procedure. Iberdisc is currently in discussion with the leasing company that owns the eight HD DVD-capable replication lines, amongst other plant equipment.

In Poland, Iberdisc will concentrate on DVD and high-definition format production. The plant will also produce the EcoDisc, the super-thin, environmentally-friendly disc developed by ODS.

“Due to the central European situation, Iberdisc can now supply its customers in Europe faster and is able to expand its network,” says the company, which also gains access to “nearly unlimited storage capacities compared to the competition.”

The company is also opening the first high-definition disc plant in Spain, at Malaga in Andalusia, where Blu-ray lines will be installed that should become operational later this year.

All is not quiet on the UK front where ODS Business Services runs a distribution centre. Its equipment, owned by a German leasing company, is for sale through second-hand equipment broker Add-Y-Pac, based in Yverdon, Switzerland. Amongst the machinery on offer are DVD and jewel case packing machines and an Axiom Packing & Despatch Conveyoring System.

Story filed 27.02.08

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