Quantegy Resumes Manufacturing - ProSoundNetwork.com

Quantegy Resumes Manufacturing

Opelika, AL (May 24, 2005)--The new owners of Quantegy have taken control of the company as of April 18, and "started coating from day one," according to new president, Peter Hutt, with new tape shipping a few days later that same week. Hutt credits outgoing CEO Richard Lindenmuth for the rapid resumption of production. During the first hectic week of operation, Pro Sound News sat down with Hutt, Lindenmuth and Quantegy's Asian-Pacific general manager, Freddie Wong, to discuss the transition and the future.
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by Frank Wells

Opelika, AL (May 24, 2005)--The new owners of Quantegy have taken control of the company as of April 18, and "started coating from day one," according to new president, Peter Hutt, with new tape shipping a few days later that same week. Hutt credits outgoing CEO Richard Lindenmuth for the rapid resumption of production. During the first hectic week of operation, Pro Sound News sat down with Hutt, Lindenmuth and Quantegy's Asian-Pacific general manager, Freddie Wong, to discuss the transition and the future.

Demand for product is now actually higher than in the recent past, says Hutt, adding that the "orders confirmed our belief" that there is still a healthy market for professional tape products. After the shutdown of the factory at the end of 2004 and Quantegy's entering bankruptcy protection, the shipping of back stock had recently resumed, including slitting and packaging bulk tape previously produced. Lindemuth says that Quantegy was "starting to make promises that we'd be back," and that he is heartened that the new incarnation of Quantegy is following through on those promises.

Initial steps towards resuming production had begun during the transition time, though only "modest amounts" of coating oxide on substrate film had occurred, Lindenmuth saying that they were mainly preparing for the transition. Hutt revealed that a "hiccup" in production has actually resulted in a product improvement, based on increased blending time of the oxide mix. The resumption of production restores position as only current manufacturer of professional audio tape, though ATR Magnetics, a division of York, PA tape machine specialists, ATR Service, has promised that it will enter the market this year.

Hutt says that the legacy products with roots in Quantegy's former incarnation as Ampex will be the first produced (499, 478) along with GP9 and Quantegy's FHD FireWire hard-drive packages. With a "fresh start," relieved of old debt, he says the initial goal is to provide product to the company's "large and loyal base of followers" while developing new products for the future that build on that base. "What we have as a legacy," he says, "is the best customer base you could ask for." Lindemuth, who has worked to help turn around a number of different companies, says he's never found in any other industry the "feeling of family and community and support" as he's found in professional audio and video.

A total of 65 employees are now back at work in the Opelika plant, with an additional five worldwide, including Wong. Even while the factory was shut down, Wong revealed that, working from back stock, his Asia-Pacific division maintained profitablility. Lindenmuth credited Wong's leadership for seeing the division through "a challenging time," with no layoffs and now talks of expansion.

While refilling his stock of tape for distribution, Wong is looking to opening the China market, primarily for videotape. Videotape is still Quantegy's most lucrative product category, and though Hutt says he's "up against Goliath," he says he likes the competition. Though challenged by Sony during the bankruptcy court's deliberations over the sale, Quantegy has retained the license to manufacture Betacam SP and Digital Betacam products.

Hutt says that Quantegy's distribution network is still in place, and that, along with customer loyalty, he has appreciated the calm and cool demeanor of distributors. "None of the contracts from the past exist any more," reminds Lindenmuth, so the new company will have to undertake negotiations with customers ranging from NASA to other manufacturers who used Quantegy products under an OEM arrangement.

Working with Hutt will be Quantegy VP Frank Foster, Hutt's partner in Quantegy's new parent company, Discount Tape, based in Peachtree City, GA. Quantegy was purchased for a reported $5.8 million, with funds from owner/operators Hutt and Foster along with private investment funds and loans.

Quantegy
www.quantegy.com