INTERVIEW-Ascend<ASND.O> mulls Asian manufacturing
By Josephine Ng
SINGAPORE, June 3 (Reuters) - U.S.-based Ascend Communications Inc is studying the possibility of manufacturing in Asia, a senior official said on Wednesday.
"We are examining China, Taiwan and Korea for manufacturing," Tony Wise, Ascend's Asia Pacific vice president and general manager, told Reuters in an interview.
Wise, in Singapore for a communications technology conference, said there was no critical timetable for the company's Asian plans.
But, if they went ahead, manufacturing would be outsourced to a third party which was likely to have an existing plant.
Ascend would then set up its own testing facility to control quality, he said.
Ascend, the fourth largest vendor of computing-networking gear, makes software and electronic devices for large networks and is one of the biggest suppliers of equipment to Internet Service Providers (ISPs) and telecoms carriers.
Wise said Taiwan and Korea were being considered because of their advanced manufacturing capabilities and China for cost benefits and for the sheer size of its market.
"We're looking at exports to Asian markets and some products for the whole world," he said.
It was likely to make digital modem products or Integrated Services Digital Network (ISDN) equipment, he said.
Wise said he expected the company to chalk up 40 percent growth in sales in the Asia Pacific region excluding Japan in 1998 compared to 1997, despite the economic rout.
Growth was being driven by China, Taiwan and Australia, he said.
Although sales in the first quarter were flat against the previous, the current quarter was expected to be the best Ascend had ever had in the region, Wise said.
The region contributes some five to six percent of Ascend's global sales, he said.
But Southeast Asia itself could see a flat performance in 1998, he said.
Half of its Asian business comes from telecoms carriers, 40 percent from ISPs, and 10 percent from enterprises, Wise said.
He said the crisis had hit the enterprise segment the hardest and Ascend was somewhat insulated as it dealt mainly with ISPs and telecoms carriers.
In markets like China, the demand for access products was rising rapidly where Asynchronous Transmission Mode (ATM) and frame relay networks were being deployed, he said.
The Internet boom was also lifting business for Ascend in the region, he said.
But business in Indonesia had ground to a halt after the rioting and political changes, he said.
Ascend had lost some opportunities in Indonesia as it had tendered for some projects which had been put on hold.
While Indonesia was politically more stable now, it would take a long time to build confidence and it could be several months before there were any indications of a resumption of network infrastructure projects, he said.
Thailand's prospects were not too bright but the Philippines, Malaysia and Singapore were doing fine, he said.
Ascend was waiting for the ISP market in India to be deregulated, he added.
Wise said he expected consolidation among ISPs as deregulation took place in more Asian countries. But Ascend would benefit because it catered to the big ISPs.
06:44 06-03-98
Copyright 1998 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similiar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. All active hyperlinks have been inserted by AOL. |
