BackEMC plans Asia expansion, optimistic on 2010
EMC plans Asia expansion, optimistic on 2010
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Singapore: EMC Corp, the world’s top maker of data storage equipment, aims to expand operations in China, India and other Asian countries despite the slowdown in the global economy, its Asia Pacific chief said on Wednesday.
Steven Leonard, EMC’s Asia Pacific and Japan president, told Reuters he feels more optimistic about 2010 on hopes for an economic recovery, but business conditions over the next six months will remain a challenge.
“We are going to make investments in R&D, training and customer support, no matter what ... We are going to grow in India, China. I am personally very interested in Vietnam and Sri Lanka," he said in an interview.
The data storage industry has been hit hard as businesses trim spending to weather the global slowdown, and margins are under pressure.
Asia Pacific operations account for 12% of EMC’s global revenue.
Leonard said he expected EMC’s operating margin in Asia to remain stable as the company reduces its costs just as customers look to spend less on their technology infrastructure. Despite efforts to shave $350 million off annual costs, Leonard said EMC continued to hire in Asia.
“Once our cost structure and our revenues are in harmony, our margins will be OK," he said.
He declined to comment on EMC’s $1.8 billion bid this week for Data Domain Inc , which trumped a rival offer by NetApp Inc.
Leonard also said a 2006 plan to invest $1.7 billion in Asia over a 5-year period had not been sidetracked because of the economic slowdown.
“I think the next six months will be a challenge. I am more optimistic about 2010 because by then people will have a chance to think, see and believe that the opportunities are real," he said.
Other Asia Pacific countries where EMC would like to expand include Indonesia, Singapore and Australia.
Leonard said EMC had $10.6 billion in assets as of end-March that could be used for acquisitions.
EMC’s sales are forecast to fall 9% globally this year to $13.5 billion, according to Reuters Estimates.
Shares in EMC, valued at around $25 billion, have risen more than 22% this year, beating a flat Dow Jones industrial average.
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