CCS Infotech mulls Rs 40cr expansion

CCS Infotech, a Chennai-based computer manufacturer and networking solutions provider, has chalked out a Rs 40 crore expansion project to double its production capacity and to expand its domestic and international operations.

Backed by domestic and international markets expansion, it expects to achieve a turnover of Rs 250 crore by 2007-08 when its international operations are expected to contribute as much to its revenue as its domestic operations.

M A Hasan Abdul Kader, director, CCS Infotech Ltd, told Business Standard that the company had earmarked about Rs 21 crore for expanding its domestic business which includes doubling of its present production capacity of 100 computers a day at its Pondicherry plant and opening offices in New Delhi, Kolkata, Pune, Ahmedabad and other major cities in western and northern regions.

The Pondicherry plant manufacturers PCs, servers and notebooks under CCS brand name. It has so far manufactured one million PCs.

It will invest about Rs 4 crore for expanding its operations in Singapore. It has a represenative in UK and a distributor in South Africa, which is a joint venture where the company would invest about Rs 7 crore. Its partner would also pump in an equal amount. It would spend about Rs 6 crore for expanding its operations in Dubai through acquisition.

Abdul Kader also said the Budget 2006 had put the local hardware manufacturing on a level-playing field by bridging the gap between imports and local manufacturer through the levy of 12 per cent excise duty on computers. "The company is bullish on its growth and is keen to tap government organisations and home segment more," he added.

This public limited company has prepared a proposal to be submitted to the Directorate General of Supplies and Disposals, Government of India, to get approval for supply of computers to government organisations.

In a bid to penetrate more into home segment, CCS is planning to increase the number of 'CCS Zone' in Chennai. It has already set up two such stores in the city and is looking at setting up 6-7 zones in Chennai alone in the next 2-3 months. It has plans to set up such stores in other parts of the state and also in other states in a phased manner.

The 17-year-old company has projected a turnover of Rs 55 crore to Rs 60 crore for 2005-06 (Rs 40 crore in 2004-05). PC sales and networking solutions contribute about 92 per cent to the topline.

CCS is planning to enter into facility management segment to provide comprehensive annual maintenance solutions. "At present, we are building expertise on this and we will provide third party solutions on IBM, HP and other foreign brand servers and notebooks," added Kader.

CCS is also keen to expand its software development business by four times in the next two years. It will invest about Rs 3 crore to expand its software operations in the US. It is in a discussion with a US-based duty drawback consultants to offer its software solutions.

It will be focusing on tier 2 or tier 3 companies in manufacturing and retail verticals.