Computer downloads have hit CD album sales worldwide

Nimbus Records was one of the UK's first companies to manufacture compact discs in 1984.

It is combating the threat to sales from CD piracy and computer downloads by reinventing itself.

The Monmouth-based company has saved costs by scrapping its warehouse and CD pressing plant in favour of using computers to store and produce albums.

Nimbus hopes to survive a further 20 years of upheaval in the music industry through what it says is a new approach to record sales.

The way of using this equipment to solve a major problem for record companies is new Anthony Smith, Nimbus Records

The company no longer stores the thousands of world music and classical CDs in its back catalogue in a warehouse in readiness for orders.

Instead, it now reproduces the amount of CDs needed to meet any order direct from computer.

Nimbus said its system of manufacturing CDs meant its older recordings were still available when other bigger companies have had to delete theirs from their catalogues.

Anthony Smith, of Nimbus Records, said: "The way of using this equipment to solve a major problem for record companies is new.

Nimbus makes CDs to order instead of storing its back catalogue

"In the past, record companies would have large warehouses where they'd keep lots of stock of each of the discs they have available.

"Now for the Nimbus label, we receive orders in the morning, we manufacture discs in the afternoon, we ship them in the evening.

"So, at the end of the day, we still have no stock, or minimum stock, available of every one of those discs."

The global CD industry has been hit in recent years by the growth of music piracy and by the increasing number of alternative formats people can use to buy and listen to music.

Illegal or 'pirated' copies of CDs account for an estimated 35% of all CD sales worldwide.

The International Federation of the Phonographic Industry (IFPI) says the pirate music trade is now worth �2.4bn each year.

Nimbus Records has survived 20 years of music industry change

Music buyers can also now download music legally onto digital devices such as Apple's iPod or pay online music stores for individual songs to be stored on their home computers.

EMI, the world's third-largest music firm, this year saw profits slump, partly due to a decline in CD sales, which fell 5.6% globally.

At the same time, many once-popular music formats like the CD single and cassette tape have declined with the emergence of new ways of accessing and buying albums or individual songs.

Earlier this year The British Phonographic Industry (BPI) revealed that the cassette single had effectively died as a format, while sales of CD singles were down by 32%.