Fujitsu Siemens considers local assembly potential

Fujitsu Siemens has reiterated its interest in establishing a PC assembly or final configuration facility in the Middle East. No firm decision has yet been taken, but senior executives admit that they are examining the feasibility of developing a facility in the region.

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By  Stuart Wilson Published  November 26, 2005

Fujitsu Siemens has reiterated its interest in establishing a PC assembly or final configuration facility in the Middle East. No firm decision has yet been taken, but senior executives admit that they are examining the feasibility of developing a facility in the region. The company has looked long and hard at the success of HP’s Saudi Arabia desktop PC facility, and a final decision on whether or not to green light the Middle East assembly plan could now be just weeks away. “We are thinking about it, but I would not say that we have concrete plans at this stage,” commented Bernd Bischoff, president and CEO at Fujitsu Siemens. “We are discussing the possibility with various parties and looking at the potential of some countries in the region. It could happen. What sort of timeline are we looking at? That depends on some agreements that we are currently working on.” “Normally, in this type of situation, we do look to work together with a local partner. The decision to establish a local assembly or configuration operation is related to the flexibility and the advantage in lead times that the facility would offer,” Bischoff added. Bischoff expects continued sales acceleration in the Middle East and Africa region, predicting that sales could triple within the next two years. Fujitsu Siemens has announced unaudited first half sales of US$3.38 billion. Of this total, Bischoff claims that approximately 10% is now derived from Eastern Europe, the Middle East and Africa. Drilling down even further, Bischoff claims that just under half of this emerging markets revenue is actually derived from the Middle East and Africa. A quick calculation based on these percentage splits puts Fujitsu Siemens sales in the region at approximately US$150m for the first fiscal half ending September 2005. Fujitsu Siemens first half pre-tax profits across all of its operations soared fourfold to US$32m — a pre-tax margin of 0.94%. Fujitsu Siemens expects this to climb in its second half. The Middle East and Africa is the fastest growing market for many A-brand vendors operating in EMEA. It is only a matter of time before the critical mass needed to justify genuine inward investment in assembly operations is reached. HP has already demonstrated through the success of its assembly facility in Saudi Arabia what can be achieved if a vendor is willing to take the plunge.

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