Business

Thu May 22 04:06:24 PDT 2008

(Adds details, closing share price, pick-up lens sales outlook)

By Kiyoshi Takenaka and Kentaro Hamada

TOKYO, May 22 (Reuters) - Japanese office equipment maker Konica Minolta Holdings Inc said it plans to spend up to 10 billion yen ($97 million) to build a new production facility for high-tech film used to make LCD panels in 2009.

Konica Minolta, which is developing lighting products using organic light-emitting diode (OLED) technology with General Electric <GE.N>, also said it plans to launch OLED lighting equipment by early 2011.

Konica Minolta competes with Fujifilm Holdings Corp <4901.T> in triacetyl cellulose (TAC) film, which protects the polarisation plate used in liquid crystal display (LCD) panels.

TAC film demand is growing rapidly as flat TV makers, such as Samsung Electronics Co Ltd and Sharp Corp are expanding their LCD panel output capacity aggressively.

"Construction of our sixth plant is completed and production is about to start, boosting our total capacity by more than 30 percent," Konica Minolta Senior Executive Officer Shoei Yamana told the Reuters Global Technology, Media and Telecoms Summit in Tokyo on Thursday.

The new plant, which will be located in Japan, will have approximately the same output capacity as the sixth line, which can produce 50 million square metres of TAC film a year.

Yamana declined to comment on expected sales of its OLED-based lighting products, but said the bendable lighting equipment will likely be used initially for special purpose lighting and then will replace conventional lighting products.

He said sales of its optical pick-up lenses for Blu-ray DVD players and other Blu-ray machines this year are likely exceed the company’s original estimate as battle over technological standards for new high-definition DVDs ended earlier this year.

Konica Minolta is the world’s largest supplier of optical pick-up lenses for CDs and DVDs, and currently dominates the market for Blu-ray pick-up lenses. Optical pick-up lenses are used to read and write data on CDs and DVDs.

"We now have one standard. That makes end-users feel comfortable in buying new-generation DVD players and DVD-equipped digital electronics," Yamana said.

Toshiba Corp gave up on its HD DVD format earlier this year after losing the support of key film studios and retailers to the Blu-ray camp, which is backed by Sony Corp.

Konica Minolta originally expected unit sales of its optical pick-up lenses for Blu-ray machines to double in the current business year ending March 2009.

Prior to Yamana’s comments, Konica Minolta shares closed up 0.4 percent at 1,748 yen, in line with the benchmark Nikkei average <.N225>.

(Reporting by Kiyoshi Takenaka; Editing by Louise Heavens)

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