eSys eyes IPO and adds plant
First eSys facility in the Middle East is set to open in December 2004 as the company chooses Dubai as its regional hub
Singapore-based eSys, one of the world’s fastest growing PC assembly companies, is currently building a major new factory in the Jebel Ali free zone, and is planning a Singapore stock market listing in 2005.
The company said the new factory – its first facility in the Middle East region - will open in December 2004 and will replace eSys’ current sub-contracted site in the Czech Republic, to better serve the rapidly growing Middle East market.
eSys chairman, Vikas Goel, said, “We believe Dubai is perfectly located for the emerging Middle East market, where growth rates are much higher than in Western Europe and the cost of production much cheaper than Eastern Europe.”
He added that Dubai was a ‘logistics hub’, which made it much more efficient for shifting PCs to the company’s front line destinations across Asia and Europe, and that it was strategically positioned for assembly. “Our components are all manufactured in Asia, so, rather than shipping them all to Eastern Europe and then getting them back out to the East, it makes sense to use a location positioned right in the middle.”
The working capital for the Jebel Ali factory is around 15 million dirhams, which includes construction, investing in raw materials, components and so on. Initially, the factory will have around 50 to 60 staff, but this is expected to grow as production at the facility is ramped up.
Founded in 2000, eSys is fast becoming one of the world’s largest PC assembly firms. This year it will shift around one million PCs. Goel said it is targeting three million a year, which will place it among the top ten companies in its sector worldwide.
The company has a strong presence in the Middle East, including Saudi Arabia, Lebanon, Oman, Qatar and the UAE. Goel added that it has now set it sights on getting into Iraq.
This represents a change in the company’s view from 12 months ago, when it refused to join the throng. Goel said: “There is a level of stability now coming into Iraq. More importantly, there are a lot of large reconstruction projects coming up, which are attractive to us.”
He expects most potential contracts to come from government led projects initially. However, as the situation eases and business begins to take its normal course. “Government involvement will reduce and make way for end users, small and medium sized (SME) enterprises and large businesses, who will start buying more computers,” Goel predicted.
Goel also confirmed that eSys was in advanced negotiations with a few companies on some of the projects where they hope to be supplying the hardware.
Turnover for the current year is around US$1.5 billion, according to Goel, and next year they are expecting sales of around US$2.5 billion next year. The four year-old firm confirmed it was planning a stock market listing next year. “Our primary listing will be in Singapore, where we get lots of tax concessions and other benefits from the government” Goel confirmed.
The move is likely to place eSys as the third most valuable IT distribution company in the world based on the preliminary market capitalisation estimates.