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Date Announced: 21 Mar 2012
Oclaro Shenzhen, China, Final Assembly and Test Operations to Transition to Venture Malaysia Over Three Years.
SAN JOSE, Calif., March 21, 2012 /PRNewswire/ -- Oclaro, Inc. (Nasdaq: OCLR - News), a tier-one provider and innovator of optical communications and laser solutions, and Venture Corporation Limited (SGX: VENM.SI), a leading global provider of technology services, products and solutions, today announced they have signed and closed a definitive agreement to transfer Oclaro's Shenzhen, China, final assembly and test operations to Venture's Malaysia facility in a phased and gradual transfer of products over the next three years.
During the three-year transition period and in order to continue to provide superior quality and delivery performance to its customers, Oclaro will retain control of the manufacturing facility in Shenzhen, and employees will remain employed by Oclaro. Several of Venture's operational personnel will relocate to Shenzhen to provide support to Oclaro, oversee the transfer, and ensure that products transitioned to Venture's Malaysia facility are fully qualified by customers before the products are phased out of the Shenzhen facility.
Over the transition period, this outsourcing activity is expected to free up in excess of $35 million net of transition and employee retention costs. The two companies have also signed a five-year supply agreement.
"Today's announcement is a significant milestone in Oclaro's strategy to adopt an outsourced back-end manufacturing model, focus on our core competencies and position the company to scale," said Alain Couder, chairman and CEO of Oclaro. "A key factor in choosing our contract manufacturing partner was to ensure we would be able to control and manage a smooth transition for our customers."
"Our agreement with Venture is expected to provide this seamless transition, while strengthening our balance sheet, and providing a financing source to fuel continued innovation. Complementing our existing outsourced manufacturing relationship with Fabrinet, this move further simplifies our manufacturing model, enabling us to create a world-class supply chain management capability, and will offer our customers greater responsiveness and flexibility."
Venture is a strategic partner for successful global companies, providing a fully integrated range of original design manufacturing, electronics manufacturing services and e-fulfilment services. Venture has been engaged in the manufacture of optic products since 1992 and is a preferred partner to global leaders in the industry for data, telecommunications and adjacent applications.
Venture's expertise covers low-level through final system assembly across a range of enabling technologies, including fixed and tunable wavelength devices, transceivers and transponders. With complementary engineering capabilities, operational synergy, real-time infrastructure interfaces and faster time-to-market, Venture has built a strong reputation for effectively managing the value chain for leading electronics companies.
"Venture is pleased to enter into this new business partnership with Oclaro, and we look forward to extending the benefits of our best-in-class design and manufacturing capabilities to Oclaro," said Wong Ngit Liong, Chairman and CEO of Venture Corporation Limited. "We will aim to deliver a seamless product transition. We see great opportunity to share our expertise with the Oclaro product development team to drive product quality and supply chain efficiency, as well as enhance our Center of Excellence for optical communications."
Manufacturing employees of the Shenzhen facility will continue to be employed by Oclaro during the transition period. Beyond the transition period, Oclaro intends to maintain a long-term customer support, new product introduction, and research and development presence close to customers and the significant talent pool in Shenzhen.
Oclaro is currently marketing its Shenzhen building with plans to sell the building to a third party and lease back the facility. Any potential proceeds from the sale of the building would be incremental to the net cash proceeds of the Venture agreement.
Source: Oclaro
E-mail: via web site
Web Site: www.oclaro.com
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