The Hindu Business Line : Ciba expected to continue contract with Satyam

Mumbai, Jan. 13 Even as major customers of Satyam Computer Services have started exploring alternative options, Switzerland based specialty chemicals maker Ciba Holding AG is expected to continue its existing contract with the Hyderabad-based company.

Satyam has showed “a very good performance in the last 18 months of its services contract with Ciba”, Mr Dominik Marbet, Head of Global Media Relations, Ciba Holding, said in a statement sent to Business Line.

“From our side there will be no short-term changes to the existing contract. We’re doing a risk assessment and are preparing further measures pending on the evolving situation,” said Mr Marbet.

Satyam is providing Ciba services related to with SAP service support, including SAP development and maintenance. The two companies had signed a five-year agreement to this effect in October 2007.

Ciba is organised in three market-focused segments — plastic additives, coating effects and water & paper treatment. In 2007, the company generated sales of CHF6.5 billion and invested CHF262 million in R&D. In September 2008, German chemical giant BASF said it plans to acquire Ciba Holding AG by paying approximately €3.8 billion.

“As we are in the procedure to be taken over by BASF in the coming months, we are very interested to continue with the current set-up,” said Mr Marbet.

Mr Deepak Parekh, member of the newly constituted board of Satyam had said on Monday that the company would ask its main clients to make advance payments in order help tide over the liquidity crunch at the Hyderabad based company.

“We were not contacted so far and would have to wait first what such discussion would lead to. Therefore we cannot further comment on these developments. In principle our contract agreements do not foresee payments in advance,” said Mr Marbet.

However, other major customers of Satyam such as BP (formerly British Petroleum) and Nestle are still keeping their options open with regards to continuation of their engagements with Satyam.

“We are monitoring the situation closely and are seeking further information and assurance from Satyam that our services will not be impacted by the situation. We are also prudently considering what other actions may be needed in order to best safeguard our systems,” Mr David Nicholas, Director-Group Media, BP, said.

A spokesperson for Nestle said: “Alternative solutions are being considered and no disruption of Nestlé’s IT operations is expected.”

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