SP Software to enter into hardware manufacturing

Chennai

January 02 2007

Hyderabad-based SP Software is entering into hardware manufacturing with an
investment of Rs 12 crore. The company is in the process of acquiring a land in
Hardware Park, Hyderabad, to set-up a CD manufacturing plant. “We are floating a
new company called SP Soft Digital Media Pvt Ltd for this purpose and initially,
we will focus only on content CD market. We will target biggies like Walt
Disney, Intel, Microsoft and EA, besides movie segment, to supply content CD for
them,” said S Pulla Reddy, Director, SP Software. As a promoter, SP Software
will hold 85 percent stake in the new venture.

The company plans to manufacture whole range of optical media products and
will try to address both domestic and overseas markets. “India is slowly turning
into a hub for content CD manufacturing and there is a huge opportunity within
India and abroad. Today, only about 25 companies are addressing this market,
which has an annual potential of 500 to 600 million CDs (refers only to Indian
market) per year,” he pointed out.

To start with, the company is putting up only one assembly line, which will
be upgraded to six-seven lines in the next three years. “We have already placed
orders to import base machines from Germany and Japan. And, the plant would be
up and running from April, 2007,” confirmed Reddy.

In the next stage, the company wants to enter into the blank CD/DVD and
rewritable market, competing with all leading brands. “We are targeting a
turnover of Rs 10 crore in the first year of operations, from this new venture,”
he added.

Overall, SP Software as a group is poised to register a turnover of Rs 80
crore in the current fiscal and is well on the track to achieve (cross) the Rs
100 crore threshold by 2008. “We have already said that we will cross Rs 100
crore mark by 2008 and there is no doubt about that. In fact, the new venture
will take us to new heights in business,” affirmed Reddy.