Singapore, July 30. (PTI): IT component distribution major eSys Technologies has charted a Rs 1,000 crore investment plan for India that includes setting up a new manufacturing facility and expanding its back office operation in the country.

"We will be investing Rs 1,000 crore in India by this financial year for setting up a new manufacturing facility in Himachal Pradesh and expanding our back office operations in Chandigarh," eSys Chairman and Managing Director Vikas Goel said. The new manufacturing plant, to be set up at an initial investment of Rs 50 crore, will be eSys' second in India after the first one in New Delhi.

Incorporated in 2000 as an IT distribution company, eSys recently forayed into personal computer (PC) business and business process and IT services as well.
eSys is the largest hard disk drive distribution company with a global market share of 23 per cent.

The new facility will augment the installed capacity of the company in India from 3,00,000 units to 3 million units per annum.

Talking about the Chandigarh facility, Goel said the company is planning to run its global operations from India which offers skills at a comparatively low cost. Currently, eSys uses its nerve centre in India and Singapore to carry this out.

We will invest another Rs 50 crore in Chandigarh and increase our headcount from 500 to 2,000 there, Goel said.

He said the shifting of global back office operations to India will save the company one-fifth of its costs.

Another Rs 900 crore will be kept as the working capital for the India operations which will be used for further expansions, he added.

About the funding plans, Goel said all the money is being generated from internal resources.
"We are a zero debt company and we intend to remain like that in future," he said. He said the company is optimistic of its India business growing at more than 50 per cent during the current financial year.

"We clocked Rs 1,600 crore during FY06 in India and we are positive about doing Rs 2,500 crore in the current financial year," Goel said.

Going forward, he said that the company was looking at a figure of Rs 5,000 crore by 2008 from its India operations.

Globally, eSys reported revenues close to 2 billion dollars during 2005-06. Goel said the company is targeting to touch 10 billion dollars in the next four years.
At present, eSys sells a meager 8,000 PCs in India, which it intends to increase to 4,00,000 units by 2010.

According to forecasts by Forrester Research, the number of PCs is use globally will almost double by 2030 to 1.3 billion, up from 575 million in 2004.

The bulk of the demand will be coming from emerging markets like India, which are expected to grow at a compounded annual growth rate of 31 per cent.

However, the Singapore-based company said it was jittery about making India as its manufacturing hub due to the existing tax structure in the country.

"We have a sub Rs 10,000 PC in our portfolio. But, we cannot launch the product in India because of the tax structure," Goel said.

Meanwhile, eSys opened its new manufacturing plant in Singapore, which houses its global headquarters and integrated warehousing and PC manufacturing hub.

Other such manufacturing facilities are located in California, Jebel Ali in Dubai and New Delhi. Apart from Himachal Pradesh, eSys has also proposed a manufacturing facility in Amsterdam. The manufacturing facility in Singapore has four lines with a production capacity of 1.5 million units per annum expandable to three million units per annum.

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