Monday July 5, 2010

Scicom eyes Asian emerging markets

By LEONG HUNG YEE hungyee@thestar.com.my

It sets sights on Sri Lanka, Vietnam and Indonesia

KUALA LUMPUR: Scicom (MSC) Bhd will focus on the emerging markets of Asia for investment as they are increasingly seen as an area with potential, according to chief executive officer Leo Ariyanayakam.

He said the company was eyeing countries such as Sri Lanka, Vietnam and Indonesia.

“The gross domestic product of these countries is rising and it will be an interesting play,” he told StarBiz, adding that markets like Singapore were saturated and hence the focus on emerging markets.

Ariyanayakam said he was optimistic about the market growth in emerging countries and was also looking at moving into the Middle East and South America going forward.

»This year has been okay. We are expecting 2011 to be substantially better« CEO LEO ARIYANAYAKAM

He said Scicom had to compete with the much bigger global players.

“Outsourcing is a very competitive business. A lot of companies from the US and the UK outsourced their work to India and the Philippines,” he said.

Scicom is a specialist in outsourced customer contact management. It provides services to multinational companies from a myriad of industries from its base in Malaysia.

The company has about 35 long-term customers, including AirAsia Bhd. The longest customer has been with Scicom for about 12 years now.

Ariyanayakam said the recent move by PT Telekomunikasi Indonesia (PTTI) to raise its stake in the company to 29.85% was a strategic investment.

“It (PTTI) recognised us for our track record, expertise and growth potential. There is a good element of trust as well,” he said, adding that the move would also be beneficial to Scicom as it would indirectly help it to penetrate the growing Indonesian market.

Ariyanayakam was elated that Scicom was recognised by PTTI. “We don’t have a big brother and we came up on our own.”

He said PTTI had some 90 million customers and had an in-house subsidiary for customer relationship management.

“We still have to bid for the business although we may have a better chance,” he said.

Over the past few years, Scicom has evolved to become more than just an outsourced contact centre and has been providing technology solutions to foreign and local companies. The company currently has four main business divisions – outsourcing, training, customer relationship management and technology.

Business process outsourcing remains Scicom’s main revenue generator. Some 80% of its business is derived from overseas, although the company is based in Malaysia.

“Malaysia is a perfect place and can offer different languages, including English, Bahasa Malaysia, Mandarin, Arabic and French proficiently,” Ariyanayakam said, adding that there were a lot more business opportunities in the country.

He said Scicom was also in the midst of setting up a full-fledged service-centric academy. The compnay started training contact centre industry-ready staff for local and multinational companies eight years ago. There have been some 3,000 diploma holders to date.

Ariyanayakam said the course focused on equipping students with the necessary skills to provide technical support to customers.

Sources said that Scicom was applying for a college licence to offer certificate, diploma and degree courses related to the services industry. They said if all went according to plan, Scicom’s college should begin operations next year.

For the nine months ended March 31, Scicom posted a net profit of RM6.43mil on revenue of RM90.5mil.

“This year has been okay. We are expecting 2011 to be substantially better,” Ariyanayakam said, adding that the “future looks interesting” for Scicom.

SCICOM : [Stock Watch] [News]

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