Gradco Announces Plans to Close Santa Ana Plant That Employs 100

Gradco Systems Inc. said Friday it is closing a Santa Ana factory that employs 100 people and moving the operation to Japan and Korea.

Irvine-based Gradco said it is cheaper to make equipment for copying machines and fax machines at its Japanese plant.

And most of its customers are in Japan, because most copiers and fax machines sold in the United States are Japanese.

Gradco said it would immediately begin phasing out manufacturing at the plant, at 3421 W. Segerstrom Ave., and close it in a few months.

The Santa Ana plant is closing as part of a worldwide restructuring Gradco hopes will cut its costs and help in get it into other businesses.

Diversifying is important because Gradco is heavily reliant on paper sorters and feeders--they account for nearly three-quarters of its sales--but no longer is the only company that makes them. And the competition is cutting into its market.

Gradco lost $1.5 million in its last quarter, contrasted with profits of $1.4 million a year ago.

The company blamed the loss on its loss of a major contract with Xerox Corp. and on problems involved in getting some of its own new products on the market.