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June 4, 1997


Redington to inject $3.5 m in India operation

Singapore's Redington will bring an extra $3.5 million into its wholly-owned Indian subsidiary, Redington (India) Private Limited. The investments, to be spread over two years, will be used to set up support facilities and expand operations.

Launched in 1993, Redington's Indian subsidiary is currently marketing a range of computer peripherals manufactured by many international companies including Hewlett Packard, Compaq, Epson and also software packages from Microsoft.

Redington's Indian operations notched up a turnover of Rs 1.71 billion, last year.

"We want to take information technology to as many smaller towns as possible in the country and make available the products all over India," R Srinivasan, director, Redington, Singapore said.

In the first step, the company plans to establish its own offices in five more centres in the country, in addition to the 11 currently in operation. "The number of offices would eventually be 27 so as to cover 80 per cent of the IT market in the country," he said.

"The extensive network, which includes over 40 service dealers, enables us to offer warranty support service to the customers throughout the country," he pointed out.

In order to strengthen the network, Redington is planning to create an 'IT backbone' within the company by setting up an online transaction processing system. Estimated to require an investment of $1.5 million, the system would enable the company to provide quicker and efficient service, Srinivasan said.

The online facility would connect all the dealers and offices to a central server of the company in Madras. He said, the system to be operational within the next one year would help the company to keep a tab on the customer requirements and also the inventory cost under control.

To establish itself further in the packaged software market, Redingtion would target leading bookstores throughout the country. "Application software from Microsoft and CD titles would soon be sold in a big way in the these stores," he said.

Redington has also identified selling computer consumables as a thrust area of its Indian operations, to be done by a 1,100-strong dealer network in the country. Both these operations would require $2 million investments by the parent company.

The company is also talking to 3-4 software houses in Madras to set up a software development centre in the city to develop software applications for exports. "The talks are in an advanced stage and a tieup will soon materialise," he said.

"Though many IT companies passed through a difficult phase last year, we achieved better results," Srinivasan observed. The company plans to achieve a turnover of Rs 2.2 billion during the current year and hopes to cross Rs 5 billion by the turn of the century.

He said that despite Madras emerging as the ideal city for infotech products and for software development, the state government's policy needs to be a little more infotech friendly. "Sales tax is one area of concern, where the government can help the IT industry," he said.

According to him, the sales of both hardware and software products attract 4 rate in Tamil Nadu as compared to zero taxation in the states of West Bengal, Karnataka, Andhra Pradesh, Delhi and Haryana. While in Maharashtra it is 1 per cent, the Pondicherry government has levied another 0.5 per cent tax on the sale of these products, he pointed out.

- Compiled from the Indian media

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