The Hindu Business Line : Cisco to locate unit in Chennai

With plans to make India its global hub, US-based networking major Cisco Systems on Wednesday announced a slew of initiatives including setting up a manufacturing unit in Chennai and tripling its manpower in the country from 2,000 at present to 6,000 over the next 3-4 years.

Cisco is also moving 20 per cent of its top executives across various divisions of research and development, venture capital fund and manufacturing to India.

These initiatives are in addition to the $1.1-billion India-specific investment announced by the company last year.

Announcing the move, Mr John Chambers, Chairman and CEO, Cisco Systems, said, "This is the first time that we are making such a commitment outside of Silicon Valley. India is a very important market for Cisco's global growth strategy."

Cisco is committed to its ongoing investment plan in India, as well as its partnership with the Indian government."

Cisco expects 5 per cent of its global revenues to come from India over the next 2-3 years.

Mr Wim Elfrink has been appointed the Chief Globalisation Officer and will spearhead Cisco's India strategy.

While Mr Chambers did not divulge the investment details for the manufacturing plant, which will be launched as a pilot next year, he said that the unit would export hi-tech products to Cisco's global market.

Initially the plant will manufacture Internet Protocol-based telephone instruments. In line with the company's outsourced manufacturing model, Cisco has selected one of its global manufacturing partners, Foxconn, to work with the company on the facility.

As part of the investments announced last year, Cisco looks to acquire companies in the broadband and digital media content business for which it has earmarked $25-30 million.

It has also set aside $10 million to set up a lab in Chennai with State-owned telecom company BSNL for developing products for rural connectivity.

Other investments include $50 million for a new R&D campus in Bangalore to be completed by June 2007, $750 million towards training and development in India over the next three years, $50 million fund to provide financial solutions to Cisco customers, $100 million towards venture capital investments in high-growth companies based in India such as Indiagames and Bharti Telesoft, and $100 million in growing its technical services capabilities, spare parts depots and channel development.

Commenting on the plans, Mr Dayanidhi Maran, Minister of Communications and IT said, "Cisco's growing investments across all its operation areas in India is a vindication of the increasingly self-sustaining ecosystem that the country provides for businesses to thrive and compete in a globalised economy."

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