NEC: Asia-Pacific key to growth, innovation

Region will contribute a significant proportion to revenues as Japanese IT vendor eyes more dollars from its overseas markets over next few years, says president.
Written by Vivian Yeo, Contributor on

SINGAPORE--The Asia-Pacific region will be one of NEC's key pillars of growth over the next several years as the company embarks on an ambitious plan to derive 50 percent of its revenues from markets outside of Japan by 2017.

Specifically, the Japanese IT vendor will look to the region to deliver half of its targeted 1 trillion yen (US$11.7 billion) revenue from overseas markets by its fiscal year 2012 ending Mar. 31, 2013, said NEC President Nobuhiro Endo. This was at a Thursday media briefing here, where his trip to Singapore marks his first as president since he assumed office on Apr. 1.

According to Endo, the Greater China region will account for 20 percent of the overseas revenue target for 2012, while 30 percent or US$3 billion is expected to be derived from the Asia-Pacific region. This includes Australia, New Zealand, India and Southeast Asia. The rest will be contributed by NEC's business units in North America, Latin America and Europe, Middle East and Africa (EMEA).

The Asia-Pacific region, he noted, was strategic to the company due to its strong potential for ICT growth, as well as its ability to contribute innovative offerings that could be exported to other regions. Citing market research data, he said the region's appetite for technology is growing at a rate of 8 percent, compared with the global ICT growth rate of about 3 percent.

In line with its aim to foster development at the regional level, NEC also expects Asia-Pacific to aid in the global expansion of its public safety and security business, said Endo. It set up a Public Security Competence Center in Singapore this April as well as an NEC Biometrics Excellence Center in Bangalore, India, in May 2010. Both facilities were designed to support NEC's global customer base.

Singapore, in particular, plays an important role, as the public and private sectors in the country are open to new technologies, he added. ICT solutions developed in the city-state could be used as a showcase for the rest of the Asia-Pacific region and beyond.

"By [working closely with] customers, we would like to create new solutions and spread the solutions that originated in APAC to the global market," Endo said, adding that one example is the ticketing and gate management system deployed at the Resorts World Sentosa's Universal Studios.

As at Mar. 31, 2009, NEC had about 2,000 employees in the Asia-Pacific region, with total revenues of US$1.3 billion.

Adding green to business mix
Elaborating on the company's V2012 mid-term growth plan announced in February, Endo noted that apart from expanding its business outside of Japan, NEC will be looking to solidify its IT and networks competencies as well as build up new businesses.

One new area the company is focusing on is lithium-ion batteries for electric vehicles through its joint venture with Japanese automaker Nissan, and other related products such as charging systems. The company expects the automotive battery-related business to be worth 100 billion yen (US$1.17 billion) by fiscal year 2012, he said, adding that it will pave the way for NEC's entry into the smart grid industry.

NEC will initially focus on growing the energy business in Japan and subsequently avail the business capabilities to the Asia-Pacific region.

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