Mahindra Satyam seeks JV in China

Move aims at getting good market access.

Mahindra Satyam, the erstwhile Satyam Computer Services, is exploring a strategic alliance or a joint venture with a Chinese partner to expand its presence in the world’s second largest economy.

“Whether it is within China or outside, we have got the capability. But what we don’t have there is real good market access,” said Rohit Gandhi, Mahindra Satyam’s senior vice-president for Asia Pacific, India, Middle East and Africa. “So, if we can, (we will) form a strategic alliance or a joint venture, with a strong local group.”

With market access being the “real challenge”, the Indian information technology provider is looking at mid-sized Chinese firms having expertise in engineering and manufacturing, as Mahindra Satyam has strong capabilities in the engineering space in China, he said.

“If we have to grow, we can either do it alone or with a partner, and we are focusing on mid-sized firms. Large-sized (partners) will be bureaucratic, and basically I think the criterion more than the size is the sort of access to the market.”

Although Mahindra Satyam is understood to have drawn out a list of Chinese firms it may seek to partner, Gandhi refused to divulge further details.

When asked whether the company would prefer to wait till its merger with Tech Mahindra was complete, he said: “A strategic partnership does not need to wait for a merger. It can happen anytime.”

Mahindra Satyam has been in China for seven years and employs 500 people, with 90 per cent local hires, at its facilities in Shanghai and Nanjing.

Moreover, following Mahindra and Mahindra’s acquisition of South Korean carmaker SsangYong Motors, Mahindra Satyam is also looking to leverage on the parent group’s presence in the North Asian country to expand its business. It currently has less than 50 employees in South Korea, but may look to scale up its presence subsequently as growth prospects “look promising,” said Gandhi.

In Indonesia and Philippines, Mahindra Satyam is exploring opportunities through Tech Mahindra, which is well entrenched in the telecommunications space.