Growth Enterprise Market-listed Intcera High Tech Group expects to improve its gross profit margin after relocating its production base from Taiwan to Shanghai. Chief executive Tyrone Tung Tai-yung said the mainland plant would begin operating in about two months. Intcera makes ceramic ferrules, which are components of the fibre-optic connectors used in telecommunications systems and data networks. Mr Tung said the production cost in the mainland would be 32 US cents per unit, compared with 75 US cents in Taiwan. The selling price of each ferrule was pitched at 80 US cents to US$1, a 50 per cent drop from the market peak in 1998, he said. The company has found it difficult to make a profit in the past year due to the high production costs in Taiwan. But Mr Tung expected the gross profit margin to improve now that it had shifted base. Minority shareholders approved yesterday a proposal for the company to transfer technology to Shenzhen Weiyi Optical Communication Technology for the manufacturing of ceramic blanks and ferrules. Intcera will receive US$2.5 million from Weiyi for the technology transfer. Of the US$2.5 million, Weiyi will pay Intcera a signing fee of US$500,000 and a royalty fee of US$2 million. Intcera agreed to allow Weiyi five years to pay off the royalty fee. Mr Tung said Weiyi was also in talks with other companies in southern China for technology transfers. He said the sale of the technology to make ferrules would be a major future income source for the group.