The Hindu Business Line : Sundaram BPO arm-ETA venture to tap Gulf BPO biz

Untapped potential
In the next two years, the new company in the next two years would have about 200 employees, who would be mostly accounting professionals and people with Arabic skills
The joint venture is expected to help the Sundaram group make inroads into the untapped potential for outsourcing in the Gulf

TARGET GULF: (From left) Mr T.T. Srinivasa Raghavan, Managing Director, Sundaram Finance; Mr Harsha Viji, Senior Vice-President, Sundaram Business Services; Mr Arif Rehman, Director (Finance), ETA Group; and Mr P.S. Raghavan, Executive Director and Head, Sundaram Business Services, at a news conference in Chennai on Wednesday. — Bijoy Ghosh

Chennai , Sept. 6

Sundaram Business Services, the business process outsourcing arm of the Chennai-based Sundaram Finance Ltd, and the Dubai-based ETA group have formed a joint venture company to tap the BPO business in the Gulf region.

Called Gulf Outsourcing Services Pvt Ltd, the new company will be based out of Chennai with office in Dubai.

Initially, Rs 2 crore would be invested in the new company with Sundaram Business having 40 per cent stake and the rest held by the ETA group, according to Mr T.T. Srinivasa Raghavan, Managing Director, Sundaram Finance.

Sundaram Finance has routed the investment through the newly formed Sundaram Business Ltd, he told newspersons.

Outsourcing in the Gulf

According to Mr Srinivasa Raghavan, companies in the Gulf region have started outsourcing BPO work to third party companies. Gulf Outsourcing would be involved in marketing in the Gulf region and Sundaram Business would do backend processing from Chennai. The new company is close to signing a deal with a Gulf-based bank, he said.

Mr Arif Rehman, Director (Finance), ETA Group, said in the next two years the new company would have about 200 employees, who would be mostly accounting professionals and people with Arabic skills. The $3 billion ETA Group, which employs about 40,000 globally, would also provide business to the new company. The joint venture with the Sundaram group was first of its kind for the ETA Group, he said.

The ETA Group is building a Rs 500-crore IT park on the Old Mahabalipuram Road. The first phase of the 4 million sq ft building is ready, and the building would be leased out to IT companies. The company is also building a residential property, called Gardens, in Bangalore at a cost of Rs 300 crore, Mr Arif Rehman said.

Future prospects

According to Mr P.S. Raghavan, Executive Director and Head, Sundaram Business Services, the new company would breakeven in two years. The ETA group brings deep knowledge of the Gulf market and would help the Sundaram group offer clients onsite and offshore processing capabilities. The joint venture would help Sundaram group make inroads into the huge untapped potential for outsourcing in the Gulf, he said.

Mr Harsha Viji, Senior Vice-President, Sundaram Business Services, said the company tested the Gulf market in the last 12 months for BPO services before forming the joint venture. There is enormous business potential for BPO, though it would be difficult to give the market size, he said.

Currently, combined revenue of Sundaram Business Services and Sundaram Infotech, also a group company, was about Rs 35 crore and together they employ around 800 employees. During the fiscal ending March 2007, the combined revenue would be about Rs 45 crore and total employee strength of 1,200, he said.

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