Nov. 20, 2000

Premier Camera Ltd. of Taiwan, already the world's biggest manufacturer of traditional cameras under own brand and OEM labels, is getting bigger by expanding digital camera production. It recently announced that it has won large orders from Rollei of Germany and Polaroid of the United States.

The order from Rollei alone calls for the production of US$ 9 million worth of 1,5 million-pixel digital cameras, as well as traditional models with 4-power zoom lenses. The order from Polaroid is for the delivery of instant cameras.

Premier's president Liu Kuei-deng made these announcements at a recent seminar for shareholders.

In his statement, he noted that for several years the company has been striving to expand its product line to digital and higher-end traditional cameras, which offer higher profit margins. Digital cameras now account over about 20% of total revenues, up from 7% last year. The ratio of digital models would rise to 25% next year, while the ratio of traditional zoom models would remain at about 34%.

Liu also announced the production start of several newly developed instant cameras models with deliveries to reach 30,00 to 40,000 pieces this year and to rise to 300,000 and 500,000 in 2001.

The company's current products consist mainly of traditional 35 mm models, APS cameras, digital cameras and telescopes, with instant cameras an additional target, he added.

The president noted that the digital models of his company included cameras with 100,000, 350,000, 800,000, 1.5 mega and 2,3 mega pixels. Next to come are a 2 mega pixel model with a 2-power zoom lens, and a 3 mega pixel model with a 4-power zoom lens.

The company expects to ship over a million digital cameras this year and is expecting to sell 1.5 million pieces next year.

As Premier is working on a one-shift system with overtime, the company will increase capacity by completing a new factory in Guandong province, China and a new office cum factory building in Taipei by July 2001.

In related news, digital cameras re accounting for an ever-larger share of cameras made in Taiwan, with industry observers saying that domestic production will expand further in response to OEM orders from Epson Polaroid, Hewlett-Packard, RCA and AGFA.

A forecast by International Data Corporation, a US market research company, worldwide sales of digital cameras are growing at an annual compound rate of 45%, and that the total volume will expand from about 11 million units this year to 16 million in 2001 and 40 million by 2004.

Profit margins in the digital camera line are comfortable due to reductions in the cost of key parts and components. To save costs, most camera manufacturers in Taiwan have replaced CCD sensors with cheaper CMOS image sensors as CCD devices used in high-end models are controlled by large Japanese suppliers like Sony, Panasonic, and Sharp.

Premier, now a household name in the world's camera business, started small in the late 70ies with a German genius Hans Nolte as chief engineer and president.