InFocus and TCL Announce 50-50 Joint Venture
Strategic Alliance Created for Global Expansion and Leadership in Digital Projection InFocus, a worldwide leader in digital projection technology and services, and TCL Corporation, a leading multimedia consumer electronic products company in China, and through its joint venture with Thomson is the world’s largest manufacturer of televisions, today announced the signing of a definitive agreement to form a 50-50 owned joint venture named South Mountain Technologies (SMT) for the development, manufacturing and sales of rear and front-projection engines and projectors. Each of the parties has committed to invest US$10M in the joint venture for a total of US$20M, to be invested over the course of 2005. Initially, each of the parties will expend up to US$1.5M to cover start up organisational expenses pending approval of the transaction by Chinese governmental authorities.
The new company will integrate the low-cost, high-quality manufacturing capabilities of TCL with the innovative technology leadership of InFocus in digital projection product design. SMT will leverage InFocus’ extensive experience with imaging devices utilizing multiple technologies for rear projection and front projection engines to provide the best price performance solutions to customers around the world. Established as an affiliate Original Equipment Manufacturer (OEM) company, SMT will manufacture and sell projection solutions to the parent companies and other brand operators in both China and the broader global markets.
Manufacturing of product will commence upon approval of the joint venture formation by the Chinese authorities, such approval is anticipated to be received within 3 to 4 months. SMT plans to begin shipping rear projection engines for sale in the second quarter of 2005.
The 50-50 joint venture will consist of an offshore parent holding company with three wholly owned subsidiaries; a manufacturing research and development subsidiary in Shenzhen, China, and research and development centers in the U.S. and Norway.
“By forming a joint venture between two industry leaders such as InFocus and TCL, we are creating a design and production powerhouse capable of manufacturing the world’s most innovative, lowest cost projection products, while significantly reducing our costs in delivering Big Picture solutions to businesses, schools and homes,” said Kyle Ranson, President and CEO of InFocus Corporation. “SMT is the next phase in the evolution of our offshore manufacturing strategy as we take advantage of TCL’s economies of scale and low-cost manufacturing expertise to license our technology to a broader market space through an affiliated OEM manufacturer.” Commenting on the partnership, Robert Hu, Senior Vice President of TCL Corporation and President of TCL Components Strategic Business Unit said, “We are very excited about our strategic alliance with InFocus. The joint venture is a key element of a major initiative in our global business expansion into digital video products, by providing us leading edge optical engine and projection designs from InFocus for our Thomson, RCA and TCL brands.”
South Mountain Technologies (SMT), headquartered in Shenzhen, China, will develop products with engineering teams seeded from InFocus in the United States and Norway, and TCL in China. SMT will leverage the local expertise of each engineering site to develop low-cost, high-quality products for global OEM customers. As part of the venture, David Glaess, Senior Vice President of Worldwide Research and Development at InFocus, will become the Chief Executive Officer of SMT.
“South Mountain Technologies represents the integration of the best of the best in projection design and high volume consumer electronics manufacturing,” said David Glaess, future CEO of SMT. “I look forward to leading SMT in its strategy to leverage the unique strengths of TCL and InFocus, and bring successful profitable growth to SMT, InFocus and TCL.”
