Mainland moves by JOS
JARDINE Office Systems (JOS), the information technology business arm of Jardine Pacific, is expanding into China, with plans to start the assembly of personal computers (PCs) and peripherals on the mainland.
JOS already has representative offices in Beijing and Shanghai, managed by Jardine Matheson, but, to expand its interests further into China, JOS has established its own China division.
Steve Lo,the managing director of JOS, said China was worth between $100 billion to $150 billion in vendors' revenues this year.
''The China market is far from saturated, and a 15 to 20 per cent annual market growth is expected in the next few years.'' JOS China plans include a fully owned subsidiary in Pudong, Jardine Trading (Shanghai), to be set up this autumn.
In the pipeline are six distribution and service centres which will be set up by next year - the first one in Shanghai, then in Pudong, and one each in Beijing, Dalian, Guilin and Wuhan.
These distribution and services centres will cater to JOS's 200 re-sellers, and make it easier for JOS's re-sellers to get access to products and buy in the local currency.
The Pudong subsidiary would be able to provide better support to its re-sellers and customers, while its representative offices would mainly have liaison functions, said Mr Lo. These centres will be set up on a joint-venture basis with local Chinese partners.
Besides trading and distribution functions, these centres will also be engaged in software development, particularly in localising software into Chinese and in the assembling of PCs and peripherals.
Because JOS concluded distribution agreements for China with Apple and Compaq early this year, it is possible the company will help Apple assemble its Mac computers in China.
Apple announced last year plans to assemble its products in China, particularly its low-cost Macs and monitors.
''It is impossible to obtain import licences for completely assembled PCs. So, for us to market in China, we have to increase our value-added activities,'' Mr Lo said.
''We will also assemble fax and copiers in China.'' JOS will also try to source components from within China for its assembling activities.
According to JOS estimates, China's PC market could be worth about $3 billion by 1995, with up to 400,000 PCs sold.
There were an estimated 100,000 units sold in 1991 and, with PC price cuts last year, sales doubled.
Sales revenue of copiers is estimated to be about $2.5 billion by 1995, while facsimiles will be worth $800 million.
JOS is also planning to open an office automation and computer products showroom in Shanghai in October.