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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (667)	3/12/1999 9:15:00 AM
From: Duker	Read Replies (1) \| Respond to of 1989

Seagate To Invest $240M In 2 China Plants Over 3-5 Yrs-Exec [For what it is worth. Some context: CapEx for 1999 and 2000 stands at $700mm per. D&A about $680. In a working cap neutral world ... Wall Street EPS are pretty close to Cash EPS. --Duker ] By I-Chun Chen BEIJING (Dow Jones)--Disk drive maker Seagate Technology Inc. (SEG) plans to invest $120 million in each of its two China plants over the next three to five years, a company executive said Friday. The investment is a jump from the $90 million total the company has so far invested in China since it began operations in Shenzhen in 1992, Seagate's Vice President and Asia Pacific Managing Director Eddie Lui told Dow Jones Newswires. The Scotts Valley, Calif.-based company will pour funds into upgrading facilities and production equipment and possibly expanding the plants, Lui said. As part of the company's overall strategy to beat competitors by getting products on the market more quickly, the increased investment will focus on improving production quality and speed, he added. Lui said the company also plans to step up technical training for its staff. "In this industry, new products come out almost every four to six months," Lui said. "More important than how we can increase volume is how to develop technical expertise." Lui wouldn't say by how much the new investments would boost production capacity at the two plants. But he said Seagate's China plants already make about one-third of the company's worldwide production of disk drives for desktop computers. Last year, each plant produced more than 7 million hard disk drives, Lui said. Sees Strong Export Growth From China Plants Although Seagate's China facilities primarily make products for export, the company plans to eventually sell more products domestically, Lui said. But he added the company is still looking into the timing and specific strategy for pushing into the domestic market. Despite weaker demand in Asia due to the regional financial crisis, Seagate's sales to Asia and the rest of the world are expected to remained stable this year, Lui added. About 50% of the company's products are sold in the U.S., 35% in Europe and 15% in Asia, Lui said, adding that he doesn't expect the proportions to change this year. Although overall exports in China are expected to decline this year as the country maintains a stable currency amid still-weak Asian demand, Lui said he expects to see "quite substantial" growth in exports from Seagate's China plants. Seagate's China factories exported $1.6 billion in products in 1997, ranking it as the top exporter among foreign-funded companies that year, Lui said. He didn't have more current figures or export projections for 1999. Lui added that he forecasts that computer sales and demand for disk drives will increase as companies and individuals upgrade their computer systems in preparation for the Y2000, or Y2K, millenium bug, a glitch that's expected to hit many older computers that can't distinguish the year 2000 from 1900. -By I-Chun Chen; 8610 6532-6652; ichen@ap.org