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Gemtek mulls building plant in Eastern Europe

With Cal-Comp Electronics and Communications having set up a set-top-box (STB) plant in Poland, Gemtek Technology is also considering building a production base in Eastern Europe in what industry observers describe as another step by the networking equipment sector to expand in emerging European markets.

Cal-Comp, a member of the Taiwan-based Kinpo Group, is running the Poland plant in order to shorten time to market in the region, the sources commented. Taiwan-based Gemtek Technology is also actively assessing the possibility of building a plant in Eastern Europe in order to speed up delivery to clients in the region, and if everything goes smoothly, the plant will be set up in the second half of this year, the sources said.

Gemtek executive director Kevin Yang confirmed that the company is considering building a plant in Eastern Europe, but nothing has been finalized. Yang remarked that Gemtek is not looking to expand its production capacity with a plant in Eastern Europe, as the company is only hoping to provide clients in the region with more cost-efficient services. Gemtek declined to reveal what products it would produce in Eastern Europe, but volume of orders for the products must be big enough to warrant a new plant, the observers commented.

The observers claimed that Gemtek is considering the new plant because of orders from European telecom carrier Multi Play for networking applications. Such networking applications usually integrate broadband, WLAN, VoIP, TV tuners and storage functions, the sources added. As Europe imposes higher tariffs on products that offer video applications, networking equipment makers that have diversified into multimedia products are building production bases in Eastern Europe to circumvent the tariffs. (