TALLINN - Lithuania's Baltic Optical Disc, the only manufacturer of audio and video discs in the Baltics, has announced that it will build a new disc production plant on Parnu Road on the outskirts of Tallinn.
Company officials said the plant, which will be built together with the company's Estonia-based subsidiary, Baltic Disc AS, is needed to meet soaring demand in the Baltics, the European Union and neighboring countries such as Russia.
Investments in the new industrial unit will reach 44 million kroons (2.8 million euros). Finance will come from two sources 's Baltic Optical Disc's own funds and Germany's Unternenung fur Ansenhamdel.
According to the manufacturers' business plan, investments will be recouped in five 's six years.
The first CDs and DVDs marked with the words "Made in Estonia" will see the light of day in October 2005 or even earlier, project managers said.
The news comes just weeks after Baltic Optical Disc announced that it was gearing up to launch its first DVD-production line in Vilnius in late April. The company said it had invested over 5 million litas (1.5 million euros) in the new line, which is the first of its kind in the Baltics.
Traditionally Baltic Optical Disc imported CDs and DVDs and packaged them at its plant.
"We will focus on servicing Latvian, Estonian and Russian companies. BOD intends to produce up to 3 million DVDs for customers from these countries by the end of this year and to receive about 5.5 million litas in revenue," director Valdas Sakalauskas was quoted as saying in the beginning of April.
Speaking of the Tallinn plant, Jolanta Zhotkevitchiene, BOD's commercial director, said that the prices of the Estonian-made CD/DVD discs would most likely remain at current levels.
"Manufacturing prices are equal in probably every European country, because we all use the same high-quality materials and technical equipment. The price of music CDs in a local market depends on how much the artist gets paid and the cost of author's rights. When the artist becomes more popular, he asks for a bigger fee and the price of his CD goes up," she explained.
Still, DVD production in Estonia will cost 10 - 20 percent less than in Scandinavian countries. "The price will certainly be lower when sales requirements are considered," Einar Pogoretsky, director of Baltic Disc AS, said.
By the end of the current year, the number of newly minted discs should grow to some 2 million copies. Maximum Tallinn factory output is expected to reach 10 million units of various sorts: CD-Audio, CD-Extra, CD-Rom, DVD5, DVD9, HD-DVD and MC.
In 2004 some 60 percent of BOD's sales were made outside Lithuania. Latvia and Estonia accounted for 30 percent, Scandinavia for 20, Germany for 10, and Russia for 40.
According to available data, 90 percent of music CDs on the Estonian market are made in Lithuania.
Estonian representatives consider that it will be easier for local clients to order DVD films and games with the new plant.
The new factory will provide some 25 jobs.
Baltic Disc AS was founded on the basis of AS Helisalv last year. Its biggest customers are Records 2000, Estonian Artist Agency, DVD202, Hitivabrik, TopTen, Perdobeat, BG Muusik, Andrico. It also has a retail network of nine MusicCenter stores.