Virtek To Focus On China Embraer JV Contracts

Virtek hopes that its current supply relationship with the regional jet manufacturer in Brazil will give it an advantage in going after contracts from Embraer's joint venture with state-owned China Aviation Industry Corp. II, or AVIC II, Virtek's vice president of business development, Kevin Quinlan, told Dow Jones Newswires in a recent interview.

The Waterloo, Ontario-based company currently provides Embraer with laser projection systems used in the assembly and laying of composite materials such as woven graphite, a key aircraft component.

"We'll compete for (contracts) and certainly hope to be the favored supplier," Quinlan said. "The initial value of (supply contracts) will be relatively small in terms of maybe a quarter million dollars in orders, but as factories are built up, (orders) will continue over time."

Embraer signed a joint-venture regional jet-manufacturing contract Monday with AVIC II units Harbin Aircraft Industry (Group) Co. and HAFEI Aviation Industry Co. The new company is called Harbin Embraer Aircraft Industry Co.

The contract calls for the annual manufacture of 24 turbofan regional jets of Embraer's ERJ-145 family of aircraft, with the first unit expected to roll off the assembly line next December.

Virtek already supplies laser projection systems to both HAFEI and AVIC I in the northern city of Xian, Quinlan said.

He said that Virtek is keen to expand its sales to China's burgeoning aerospace market as well as in supplying similar assembly-aid systems for prefabricated houses.

Virtek's penetration of the prefab-housing market depends on the success of joint lobbying efforts by the Canada Mortgage and Housing Corporation and the American Paper and Forest Products Association for the approval of new construction codes for wood-frame houses.

Counterfeit-Busting Technology

Quinlan said that Virtek also is considering setting up manufacturing, service and support capabilities for its counterfeit-foiling, laser-marking equipment line.

The company already is scouting for partnerships with engineering firms that can be equipped to support laser-based marking systems and hopes to have a China-based service and support system in place by the end of 2003, the executive said.

Virtek's laser-marking technology allows for permanent marks of various designs to be applied to a variety of materials including glass and metals.

"With laser marking, it's a permanent mark that can go on your bottle or some material and can help to prevent counterfeiting, such as in the cosmetics industry," Quinlan said.

Laser marking provides a nearly foolproof measure for manufacturers and consumers to ensure that products sold in China's counterfeit-rife marketplace are genuine.

China's counterfeiters produce fakes of everything from Rolex watches to computer software, inflicting big losses on companies whose products can't compete with lower-priced bootleg versions.

"It will basically create a barrier to the whole counterfeiting industry and just makes counterfeiting that much more difficult to do and more easily identifiable," Quinlan said.