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Satyam Eyeing Alliance or Acquisition in Japan

Satyam has said it plans an acquisition or alliance in Japan; a market the company expects would contribute more than four percent of its sales in three years.

The company has more than 200 employees in Japan, which now accounts for 1.5 percent of Satyam's sales, Shailesh Shah, senior vice president for corporate strategy, said. He declined to identify potential partners or takeover targets of the Hyderabad, India-based company.

"We are looking at creating something that's Japan- specific," Shah said. "The Japanese market is significantly different from the rest of the world, and we want to serve that market as if we're a local company."

Satyam is expanding into Japan at a time when the economy is having its longest post-war expansion as rising company profits encourage companies to spend more on factories, equipment and services. Satyam's customers in Japan include Nissan Motor, an automaker, as well as banks and telecommunications companies.

Satyam at present earns 16.5 per cent or USD 165 million of its total revenues from the APAC region, which has been neglected by Indian IT companies because of its fragmented nature and because it is perceived as a difficult terrain to do business.
Satyam has been clocking a growth rate in excess of 50 per cent from this region for the past three years, Virender Aggarwal, Director and Senior Vice-President, Head of Asia Pacific, Middle East, India and Africa, Satyam Computer, said. At present, Japan accounts for 1.5 per cent of its revenues, almost identical to the earnings of other Indian IT companies from that country. "Acquisition is the only route to crack the Japanese market," he said.


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