Infotech to set up China beachhead

Infotech Enterprises, a mid-sized engineering solutions company, is planning to set up a facility in China.

According to the company sources, a team of its executives had already visited China and almost decided on setting up a Chinese arm.

If all goes well, a start-up like facility would be up and running sometime next year. The unit would initially cater to the needs of its existing customers having their operations in China.

The arm would initially have a team of about 50 people, mostly sales and support professionals. However, it is still not clear if Infotech would look at sourcing projects from China, apart from supporting its existing clients.

In fact, sources said, the trigger for Chinese facility came from the plans of one of the company’s key customers, Pratt & Whitney. The global leader in the design, manufacture and service of aircraft engines, industrial gas turbines and space propulsion systems has been working on expanding its presence in China for sometime now. Being a key vendor of the company, Infotech is keen on having its facility closer to the customer’s base.

“There is a similar operation in Japan for Infotech. The Japanese facility, too, is compact but important for aligning the operations with the requirements of the customers. The Chinese facility, too, would immediately cater to the requirement of Pratt & Whitney, though the overall plan would be to go beyond a single customer,” the source said.

However, the company is still not talking about the plan in detail.

“We are keen on looking at operations in other geographies and the expansion would be dependent on the customers. It makes more sense to have a geographical footprint linked to the presence of our customers than being in isolation,” a company spokesman told DNA.

Meanwhile, the company announced an interim dividend of 25% for the financial year 2011-12.

This interim dividend would earn `1.25 per share on the face value of `5.  Infotech had issued 1:1 bonus earlier in June 2010. It also doubled the payout ratio up to 20% of the profit after tax on consolidated basis as against an average of 10% maintained in the past.