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February 20, 1998


VXL is reworking strategy

Email this story to a friend. With computer hardware manufacturers finding the going tough, the Bangalore based VXL Instruments is reworking strategy for both domestic and export markets.

Though the present rupee depreciation has come in handy to VXL, the crash in the value of the currencies of the Southeast Asian nations has come in as a dampener.

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However, VXL Chairman and Managing Director A V Kasargod said the company is yet to feel the pinch of the Southeast Asian currency devaluation.

"In the export market, we have managed to compete with Taiwan and Korea even in the present scenario where the currencies of these countries have been devalued.''

He said exports, which at present account for about 55 per cent of the company's turnover, are likely to go up to 75 per cent next year.

"Our strategy would be to push exports as there is a big market abroad for our products,'' Kasargod said. "There is a big vacuum in the international terminal market with some established players pulling out of this area of business. But there is still a big market for terminals, which would be of the order of about $2 million. We plan to cash in on this and push our exports,'' Kasargod said.

"The markets that we cater to are the US, Japan and Europe. Also, we plan to extend our export operations by making inroads into the Australian and West Asian markets,'' Kasargod said.

As the company cannot afford marketing costs abroad, its UK subsidiary is open to the idea of manufacturing products in the brand names of overseas companies. It has already been doing this for a US terminal manufacturer for two years now. "We manufacture monochrome and colour terminals for a US company which is sold under the US company's brand name,'' he said.

Kasargod denied that VXL is divesting its stake in the UK subsidiary from 60 per cent to 49 per cent.

As far as the domestic market is concerned, the company plans to ride high on Winlinx (also known as thin client solutions for NT) - a terminal for use with multi-user versions of Windows NT, Nikhil Burde, manager, export sales and software support, said.

The Windows terminal, an alternative to PCs in the local-area network environment, is designed to display and operate under the Windows NT environment.

Connected to multi-user Windows NT servers, Winlinx terminals provide cost-effective connectivity to the central processing servers.

Operating very much like general-purpose terminals and UNIX servers, Winlinx terminals act as clients for the new multi-user Windows NT servers, which include Citrix, WinFrame, Insignia, NTrigue and WinDD.

"As far as the Indian market is concerned, we will push our thin client NC solutions, while terminals will, for the next few years, continue to be our major source of income. Also, it is likely that thin clients, which are cheaper than PCs, will eat into about 80 per cent of the PC market soon,'' Burde said.

VXL Instruments started as a manufacturer of terminals.

Three years ago, on acquisition of technology from Godrej, the company started manufacture of networking products.

For the six months ended September 30, 1997, VXL Instruments reported a turnover of Rs 214.3 million against Rs 166 million in the same period the previous year.

While the gross profit went up marginally to Rs 13.5 million (Rs 12.1 million), the net profit was at Rs 6.5 million (Rs 4.7 million).

Also, exports grew 100 per cent in the first half of the current fiscal compared to the same period the previous year.

- Compiled from the Indian media

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