Q-Media Expands Disc Production in Irvine, Eyes DVD
Last May, Canada’s Q-Media Services Corp., which produces, packages and distributes programs for software makers, completed a $1 million overhaul of its Irvine facility. But already an ongoing shift in the software industry has the company eyeing further expansion. Demand for software on high-capacity digital video discs likely will bring on another several hundred thousand dollars in new spending in the next year, according to Chris Ponce, Q-Media’s Irvine operations director. “Our customers are asking us to explore that and their interest continues to grow,” Ponce said. “We’ve already outsourced some of that work to third parties. So as the demand increases, it creates a cost-justification for us to retrofit.” Ponce said he is preparing to further expand both space and production in the next three to 12 months. The company’s upgrade earlier this year means its facility could shift to DVD production with just some minor adjustments. “Our equipment is DVD compatible,” Ponce said. The unit of Vancouver, B.C.-based Q-Media Corp. can produce about 3 million discs a year. In Irvine, Q-Media employs 80 people full time and has another 70 temporary and part-time workers. DVD retrofitting, when it comes, stands to add another 10 to 15 employees, Ponce said. “We expect this industry will continue to develop,” Ponce said. “We will continue to develop with it.”
Q-Media handles the grunt work of the software industry. While big-name software makers spend millions developing the code behind their products, Q-Media and others like it actually produce, package and distribute software on discs. One big rival is Milwaukee-based Journal Communications Inc.’s IPC Communication Services, which operates a Foothill Ranch plant that employs about 150 employees and as many as 200 temporary workers, according to a company spokeswoman. Other industry players include Toronto-based Cinram International Inc., which operates a plant in Anaheim, and Plymouth, Minn.-based Zomax Inc. In Irvine, Q-Media produces discs for Seagate Technology Inc. and Toshiba Corp., which bundle software with their computer products. The site also produces software for Irvine-based Triconex Corp., a maker of industrial controls that’s part of Britain’s Invensys PLC. Microsoft Corp. also is a customer, as is Toronto-based contract electronics Celestica Inc., whose Foothill Ranch facility turns to Q-Media for software production on some jobs. Q-Media’s Irvine operation came by way of the company’s 1998 purchase of Hart Graphics Inc.’s manufacturing and fulfillment unit for $5 million. In the past few years, Q-Media has been expanding through acquisitions: earlier this year Q-Media bought plants near Seattle and Boston from Montreal’s Quebecor Printing Inc. for $63 million. Q-Media plans to provide $30 million in services to Quebecor in the next four years. Q-Media, which counts annual sales of about $65 million, has 20 assembly lines in North America. The company set out on its expansion after customers started asking for faster production turnaround. Q-Media bought its way into Nashville and Austin, Texas, to serve Dell Computer Corp. The company’s Seattle facility serves an IBM Corp. unit. And Q-Media bought its Irvine plant to serve Toshiba. Toshiba requested Q-Media start up local disc production late last year. Ponce and his boss, Irvine General Manger Ron Howard, got manufacturing up and running in May. “They started to diversify their product,” Ponce said. “Instead of continuing to fill their orders from our other locations, we added space in Irvine.” Q-Media spent more than $1 million on injection molding and finishing lines, testing equipment, a four-color screen printer and a complete pre-press room. “We are a full-service supply chain management facility now,” Ponce said. The company has filled out its current 87,000-square-foot facility on Barranca Parkway and leased another 15,000 square feet to replace assembly and warehouse space that was converted to disc manufacturing. Now the Irvine facility can produce a revised product for a customer in 24 hours, Ponce said.
The expansion also has opened the door to producing DVDs, which have about seven times the capacity of regular CDs. So far, the biggest use of DVD is for movies. But Ponce said he expects to see customers such as Dell and Toshiba putting out more software on DVD. As DVD drives get cheaper and become more widespread, developers are expected to make use of the extra space the discs offer, he said. “Toshiba and Dell already include DVD drives in their PC and notebook products,” Ponce said. “Rapidly changing and advancing hardware technology drives demand for new applications.” Q-Media already is seeing demand for DVD in some locations, he said. n
