Stratech Systems penetrates India’s IT market

Mainboard listed, IT systems and technology developer, Stratech Systems Limited ("Stratech"), today announced a strategic alliance with HCL Infosystems Ltd ("HCL Insys"), one of India’s leading technology integration companies, together with its wholly-owned subsidiary, FEC Infosystems Pte Ltd ("FEC"), to set up an Offshore Development Centre ("ODC") that will also spearhead Stratech’s business expansion into India’s lucrative IT market.

HCL Insys is a listed company and part of the HCL Group in India. Established in 1976, the HCL Group is one of the largest IT companies in India with worldwide revenues exceeding S$1 billion. It has a staff strength of 9,000 and offices in 14 countries which represents a coverage of over 80% of the global IT services market. Its technology bandwidth spans across hardware, software, networking, systems integration ("SI"), IT outsourcing, transaction processing, complex project management, education and knowledge ware.

An industry stalwart with major public and private sector accounts in India, as well as partnerships with blue chip MNCs like Hewlett-Packard, Microsoft, Novell and Intel, HCL Insys offers a rich network of contacts through which Stratech will leverage on to implement a comprehensive marketing and business development strategy to penetrate India’s IT and technology market. The strategy will cover the timing of Stratech’s entry into India, determine and develop technology solutions suitable for deployment in country and identify target customer segments.

The joint offshore development centre could potentially result in significant software development cost savings for Stratech. It will also allow Stratech to focus on research and development ("R&D") as well as product development so as to create innovative software technologies and state-of-the-art systems. Coupled with the benefit of HCL Insys’ extensive network of sales and service centres in India, Stratech is set to achieve a strong presence in one of the world’s largest potential markets for technology-intensive systems and e-business technologies.

Stratech’s proprietary know-how in the field of intelligent Transport Systems ("iTS") - advanced technologies that enhance driver and road user productivity and improve the efficiency of the transport and road infrastructure; has been mutually identified by Stratech and HCL Insys as the initial beach-head technology for Stratech to break into India’s untapped transportation market. There is great growth potential for Stratech to provide the solutions and technologies to help the local authorities to ease and better manage the traffic conditions in Indian cities. Stratech can draw experience from its commissioning by the Shanghai Municipal Government, to develop and deliver the White Paper for a world class transportation system in Shanghai. In addition, Stratech has the proven track record of developing and implementing a Vehicle Entry Permit ("Electronic") Toll System ("VEPS") and has recently been awarded a S$40.3 million contract to develop, both of which are for the Land Transport Authority of Singapore.

Said Dr David K.M. Chew, Chairman and Chief Executive of Stratech: "We chose HCL Insys as our strategic business partner in India, as they are one of India’s leading technology integration companies. Also, as an aspiring global technology player, business expansion into new markets is the way forward for us. Unlike other major IT companies, the bulk of whose revenues come from the overseas markets, the majority, more than 70%, of HCL Insys’ revenue comes from within India. With this, we see great potential in marketing our technologies in India, by tapping on the extensive network and contacts that has been established by HCL Insys."

India, with a continually growing population in excess of 1 billion, has evolved to become a global hotbed for IT entrepreneurship. According to Newsweek magazine ("Web Warriors" by Ian Mackinnon, Newsweek, October 16, 2000), venture capital in India’s IT industry is expected to rise from US$150 million in 1998 to US$10 billion by 2008. By market value of public companies, India’s technology sector has grown from US$100 million to nearly US$100 billion in 10 years, and nearly 200 of America’s 500 largest companies now buy software services from Indian firms. Despite the worldwide meltdown in valuations of technology stocks around the world, Newsweek notes that analysts and investors remain bullish on India’s IT prospects, with the belief that the country’s IT sector is just at the beginning of a long-running boom. With India’s IT sector identified as a major engine of economic growth in India coupled with continued inflow of foreign investment, Stratech is well positioned to tap on the opportunities offered by this huge burgeoning market.

Said Mr Ajai Chowdry, Chairman and Chief Executive Officer of HCL Insys, "We are glad to have access to Stratech’s suite of world-class technologies and know-how, which will add value to our current portfolio and facilitate our business expansion into both the India and Singapore IT and technology markets. We see this as a strategic working partnership for both parties. We are confident of our success and our ability to tap on each other’s core competencies to grow our businesses globally."