Hitachi to tap IT solutions, railway systems opportunities in Asean

The Japanese giant aims to double Asean’s contribution to its IT-solutions business for the financial sector within two years, said Mitsuhisa Kajiyoshi, senior vice president and general manager for the regional ICT solutions business.

He said the Asean region now contributed only 4 per cent of total revenue earned by the company’s ICT (information and communications technology) solutions business.

However, he said the company’s ICT solutions business was now present in Malaysia, Singapore, Indonesia and Thailand, and was starting up in Vietnam.

"There are many opportunities considering [being considered] by the company in Thailand. They include providing IT systems and service models to support banks, as well as automobile and motorcycle makers owned by Japanese companies."

Keiichi Shiotsuka, chief executive of the systems and service business, information and communication systems, said Hitachi wanted to increase the contribution of ICT business from overseas markets (outside Japan) from 30 per cent currently to 35 per cent next year, of which 80 per cent would be from Asia.

He said the company expected total revenue from its ICT solutions business, including hardware such as automated teller machines (ATMs), data centres and servers, to increase from 1.9 trillion yen (Bt527 billion) in fiscal 2013 to 2.1 trillion yen in the next fiscal year. Revenues from overseas markets will surge from 588.4 billion yen in fiscal 2013 to about 735 billion yen in fiscal 2015, the company hopes.

"Banks and financial institutions have played a significant role in supporting the region’s economic growth," Shiotsuka said.

He said financial businesses were rapidly growing the economy and cross-border business in Asean. Financial institutions in this region are also increasing their investment on advanced IT systems to expand their businesses and enhance their services. Japanese mega-banks are accelerating expansion into Asean markets and alliances with Asean financial institutions.

He said Hitachi had provided IT systems and data centres to banks and financial institutions. The company has also provided security systems for bank accounts and ATMs, as well as all-in-one solutions for the banking system.

The company will strategically expand financial front-end solutions with mobility, including cash management, Internet/mobile banking and credit management. It will also provide high-performance/high-reliability ATMs and develop payment services while building IT infrastructure to support Japanese mega-banks’ expansion into Asean.

Alistair Dormer, global CEO for Hitachi Rail, said the company’s vision for its railway-system business was to become a truly global company, and Southeast Asia was a very exciting market for railways in the future, driven by population expansion, urbanisation and rapid economic development.

He said connectivity of major cities as well as the expansion of mass-transit systems would improve the lives of urban populations.

"We have seen emerging opportunities for particular markets in Southeast Asia. However, each market requires an appropriate approach for Hitachi. We are conducting continued analysis and long-term feasibility studies for the candidate markets where we will expand our manufacturing facilities for railway systems into the region. The consideration will be based on local supply bases and communication links in the country," Dormer said.

"For Hitachi, we are not looking at only speed in the development of our railway system, but also in harmony with the environment, such as lightweight systems and energy-reduction capability. The company itself has a long history of traffic-management systems based on its rich IT experience," he said.

Dormer said Hitachi had doubled its railway-system business over the past seven years, and the business would double again in the next five years.

Shinya Mitsudomi, global chief strategy officer for rail, said Hitachi was keen to expand its profile in the railway system in Thailand.

"We are expecting upcoming monorail opportunities as well as heavy rail projects such as the Red Line. We have investigated signalling opportunities in the country as well," Mitsudomi said.