VisualSoft To Hive Off Product Divn Into Arm

Hyderabad: | Updated: Aug 30 2002, 05:30am hrs
In order to become a pure end-to-end solutions player and to avoid further losses in the product division, VisualSoft Technologies Limited has proposed to hive off the product division into a separate subsidiary.

Accordingly, the company is working towards bringing out a separate product strategy, which includes hiving-off of the product division into a separate subsidiary and bringing in strategic partners for both technical expertise and marketing the products, according to company chairman and managing director DVS Raju.

The possible scenarios can be either hiving off the product division into a subsidiary, or if required, rope in strategic partners to take the products to the markets, Mr Raju said in the companys annual report.

As most of the companys products are oriented towards developers market, the slowdown has had a direct bearing on the companys product division, which affected the companys net profit margin to some extent, Mr Raju pointed out.

The products business of the company was severely affected due to the poor spending on information technology by the global majors last year. And VisualSoft expects this trend to continue for some more time.

With the given condition in the product division, it was felt that hiving off the product division would be an ideal solution for the company to focus more on the end-to-end solutions and emerging ITES sector, Mr Raju argued.

When contacted, VisualSofts vice-president V Krishnan told The Financial Express that the company is trying to rope in some of the US-based product developers as strategic partners.

We expect to locate some good partners in the next one or two quarters time and accordingly we will come out with suitable plans. The company would like to hold majority stake in the proposed new entity while the foreign partners would bring in technology and invest in the company, he added.

To capture the additional and emerging business opportunities, VisualSoft also plans to enter into business process outsourcing (BPO) arena and ITES segment.

The company has acquired 106 acres of land in Vishakapatnam to set up a separate centre there for BPO segment.