Satyam will serve Japan through Dalian

HYDERABAD: With the middle kingdom emerging crucial in its North American de-risking plan, Satyam Computers is exploring the four corners of China to ramp up operations. Currently, Satyam has 400 employees in China, of whom 250 are employed at a large software development centre in Shanghai.

It also has an office in Beijing and a small software development operation in Dalian.

However, according to co-founder and company MD Rama Raju, apart from looking to set up a large campus in Dalian as a nearshore centre to service the lucrative Japanese market and Korea, Satyam has also struck negotiations with the local government in Chengdu, the capital of Sichuan province in South-west China.

Simultaneously, talks are also on for possible locations in Nanjing and Guangzhou, which is close to Shenzen and Hong Kong on the East.

A major Chinese play is important for Satyam, which derives over 65% of its revenues from North America while Europe contributes 18% and APAC 16%.

“We are exploring various locations and we will have one large campus in China, apart from Ganzhou and Dalian, which we will use to service Japan,” Raju told DNA Money. Dalian is ideally suited, given the easy availability of bi-lingual resources both for Japanese and Korean, he added.

Being the second-largest IT market after the US, Japan is an attractive proposition for Satyam. Though it is one of the earliest companies to set foot in Japan, setting up a development centre as early as 1995, Raju contended it was not an easy market to deal with.

While language was a major challenge, the skills required are also different for the market.

Therefore, Satyam is also looking at a niche acquisition in Japan to fill this gap, Raju informed.

“We are not looking at an acquisition to add to our topline but mainly to add to the skills and competencies required to address the Japanese market”, he said.

While Raju did not divulge either the size or the time-frame of the proposed acquisition, a company source said it was looking for a fit in the range of $50 million.

Overall, Apac was emerging a major focus for Satyam, which has perhaps the biggest footprint in the region when compared to the peers from Indian industry, Raju contended.

China, Singapore and Malaysia would emerge as major growth areas for the company in the coming days, he said. Satyam is not the only Indian company that has major plans for China.

While India’s biggest IT company TCS has a major presence, Infosys which currently has close to 300 people there has said it plans to increase the number to 6000 over the five years.