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Friday, June 24, 2011

Prime Focus plans units in New York, London

This news story first appeared in DNA Money edition on Thursday, Jun 23, 2011.

Prime Focus, visual entertainment services firm, would spend $15-17 million as capital expenditure on its domestic and international operations in the current fiscal. The expansion will be funded through internal accruals.

Namit Malhotra, managing director, Prime Focus, said on an analyst call, “Three facilities are being built in New York, London and Mohali. So there will be fairly significant amount of capex for that.”

The facility in New York will be a post-production set up while the London one would be a visual effects facility. These facilities will be operational within the next 3-4 months. In Mohali the company is looking to expand the existing unit.

Nishant Fadia, CFO, Prime Focus, told DNA Money, “The new Mohali facility will be for 2D to 3D conversions. While New York facility will not be very capital intensive, we envisage the London and Mohali facilities to take up a large part of the capital expenditure.”

The Mohali unit currently employs 730 people and the number is expected to more than triple by the year end. “We will be hiring anywhere between 2,000 and 2,500 people for the new facility at Mohali,” said Fadia.

On the back of Hollywood blockbusters like Star Wars: Episode I The Phantom Menace (yet to release in 3D) and the Warner Bros’ Green Lantern, the company sees exponential growth in its 2D to 3D conversion business.

The management believes 3D conversion is the most exciting part of their business and is already contributing substantially to the company’s topline.

“The 3D conversion business has been getting good traction from the international markets and has contributed $40 million to the company’s topline last year. With a robust pipeline for the next 24-36 months, we see substantial improvement in the business,” said Fadia.

The company currently has an order book of Rs350 crore, of which around Rs250-260 crore is for 2D to 3D conversion.

Prime Focus’ 2D to 3D conversion process, View-D, is a proprietary system introduced in September 2009. The company has thus far worked on a host of international projects including Avatar, Clash of the Titans, Cats and Dogs, Chronicles of Narnia and Shrek.

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