Hitachi Systems and Sunway Technology establish IT services JV
By Digital News Asia March 8, 2013
- Joint venture to meet rising demand for IT services in SEA
- Hitachi Systems to acquire a 51% stake in JV company, Sunway E-Systems
HITACHI Systems Ltd. a wholly owned subsidiary of Hitachi Ltd, and solutions provider Sunway Technology, a privately owned entity of the Sunway Group, have established an IT services joint venture (JV) that will tackle the South-East Asian market, with an emphasis on Malaysia.
Tan Sri Dr Jeffrey Cheah (pic), the main shareholder of Sunway Technology and also the founder and executive chairman of Sunway Group, said the collaboration would capitalize on “Hitachi System’s track record and capabilities and our host of products and services as well as (our) existing network in South-East Asia.”
It would enable “the two companies to make further inroads and open new markets in the region,” he added.
With continued economic growth in South-East Asia, a host of international firms -- Japanese companies among them -- are advancing into the region. Consequently, demand for IT services is rising, including among local companies, the two companies said in a statement.
The Hitachi Group is accelerating its own business development in South-East Asia as it aims to generate consolidated revenues of ¥200 billion (US$2.14 billion) from the information and telecommunication systems business in Asia in fiscal 2015. In this context, Hitachi Systems is targeting consolidated revenues of ¥500 billion (US$5.34 billion) and an overseas sales ratio of 10% in fiscal 2015.
Under its medium-term management plan, Hitachi Systems is pursuing various measures including “GNEXT” global IT services supporting Japanese companies that are expanding operations globally, cooperating with Singapore-based Hitachi Asia Ltd. and other Hitachi Group companies in South-East Asia.
Against this backdrop, Hitachi Systems and Sunway Technology will jointly establish an operating company for the provision of IT services in Malaysia and throughout South-East Asia.
Specifically, the operations of several Sunway Technology's subsidiaries will be consolidated under Sunway E-Systems, a wholly owned subsidiary of Sunway Technology. Hitachi Systems will then acquire 51% of Sunway E-Systems’ shares from Sunway Technology, making Sunway E-Systems a JV.
Subject to approval from the relevant authorities, the name of the JV company will be Hitachi Sunway Information Systems. In addition to the existing subsidiaries in Singapore, Thailand, Indonesia and the Philippines, Sunway E-Systems will also form a subsidiary in Vietnam this year.
Via this partnership, both companies will expand marketing to both Japanese and local companies around Product Lifecycle Management (PLM) and Enterprise Resource Planning (ERP) packages, virtualization, cloud solutions, data center outsourcing and IT outsourcing services.
Commenting on the arrangement, Naoya Takahashi (pic), president and CEO of Hitachi Systems Ltd, said he believes the JV will provide customers in South-East Asia with sophisticated IT platforms and solutions.
“This will be achieved by fusing Sunway Technology's expertise and experience in PLM, ERP, virtualization and IT outsourcing services, with our state-of-the-art technology and command of data center outsourcing and cloud computing services,” he added.
Hitachi Systems will take advantage of the joint venture’s base network to further expand sales of its GNEXT global IT services, and will globally develop its IT business through partnerships with Sunway Technology, as well as with Hitachi Asia, Hitachi eBworx and other Hitachi Group companies in South-East Asia.
The JV will create a bigger pool of resources and allow both to leverage on each other’s expertise, strengths and networks to cater to more demands with the bigger market reach.
Since its establishment in 1984, Sunway Technology has been providing solutions and services to more than 800 organizations in Southeast Asia which operate in various industries such as financial services, healthcare, automotive, oil & gas, construction, retail & distribution and manufacturing.
JOINT VENTURE AT A GLANCE
Hitachi Sunway Information Systems Sdn Bhd (a new company name is subject to approval from the relevant authorities)
Petaling Jaya, Selangor Darul Ehsan, Malaysia
Masato Saito (Chairman)
Cheah Kok Hoong (Group CEO)
|Start of Operations||
April 2013 (tentative)
- Applications: Enterprise Resource Planning (ERP), Software-as-a-Service(SaaS), etc
- Engineering Solutions: Product Lifecycle Management (PLM)
- Infrastructure & Managed Services: Virtualization, Cloud Solutions & Services, Data Center Outsourcing (DCO), and Information Technology Outsourcing (ITO) services
Approximately 170 (including group companies)
|Group Company Locations||Singapore, Thailand, Indonesia, Philippines|
275 million yen
Hitachi Systems, Ltd. (51%)
Sunway Technology Sdn Bhd (49%)