Financial Daily from THE HINDU group of publications
Wednesday, May 21, 2003
Financial Daily from THE HINDU group of publications Wednesday, May 21, 2003 |
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Info-Tech
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Alliances & Joint Ventures D-Link, Gigabyte plan joint venture Our Bureau
Mr K. R. Naik, CMD, D-Link (left) with Mr Tony Liao, Vice-President, GigaByte Technology, at a press conference in Mumbaion Tuesday.
MUMBAI, May 20 D-LINK (India) Ltd, the networking and communications company, and Gigabyte Technology of Taiwan, a global major in the manufacture of motherboards and VGAs, are setting up a joint venture company, Digi Giga Systems Ltd, with an equity capital of $1 million. According to Mr K.R. Naik, Managing Director of D-Link, the Indian company would hold 90 per cent stake in the venture while the foreign partner would hold the remaining stake. Initially, the joint venture would engage in marketing, distribution and servicing of motherboards under the brand name `Gigabyte'. The motherboards would be manufactured at D-Link's existing facilities in Goa. According to Mr Naik, the Taiwanese company may bring in more funds to raise its equity at a later date as the business grows. Gigabyte's stake in the new venture has been pegged low currently since the venture does not have to lay out capital on setting up new facilities. The new alliance strengthens an existing tie-up between the two companies for the launch of motherboards under the brand name `Digilink-Gigabyte'. The year-old alliance has a 20 market share, and supplies motherboards to several OEMs, including HCL and Wipro. "Our experience with Gigabyte over the past year convinced us that a joint venture would be the way forward for increased growth," said Mr Naik. The joint venture, which has targeted a market share of 30 per cent in the first year, will also deal in products such as add-on cards and peripherals under the `Gigabyte' brand. Net up at Rs 22.13 cr: For the year ended March 31, 2003, the company posted a net profit of Rs 22.13 crore, compared to Rs 18.21 crore in the previous corresponding period. According to the company, gross sales for the year stood at Rs 205.18 crore (Rs 174.32 crore). The board of directors has recommended a dividend of 80 per cent. The earnings per share (face value Rs 2) for the year ended March 31, 2003, works out to Rs 7.37 (Rs 6.07).
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