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SCMP Reporter

RISING costs have helped push United States-based computing firm Unisys into moving its regional headquarters from Hong Kong to Singapore, as part of sweeping structural changes in Asia.

  The changes, announced last week, make Singapore the operational base of a new organisation formed through merging Unisys' Hong Kong-based Asia Group and its Sydney-based South Pacific Group.

  Unisys Hong Kong and China operations were also merged. The move, which was announced internally last October, generated enormous turmoil within the firm and led to the departure of several senior sales and marketing staff.

   Insiders said the merge was more a direct take-over of the Hong Kong operation by the China operation.

  Unisys also unveiled plans to sink US$10 million into a wholly-owned subsidiary in China. Previously, it operated in China only through representative offices.

  Alastair Taylor, the Asia-Pacific Group president, said the rising cost of doing business in Hong Kong was a big part in the decision to relocate.

  The move - planned for June - will happen at the same time that the firm's long-term lease expires on its office space in the Sun Hung Kai Centre, Wan Chai.

  Though Unisys will give up a portion of its office space, it is understood that much of the area made available through the relocation of regional staff will be taken up by the expanding Hong Kong-China operation.

  ''Cost was certainly a consideration,'' Mr Taylor said.

  ''The cost of doing business in Hong Kong is significant and, if your headquarters' operation can be flexible, and located anywhere in the region, why pay substantial increases in cost each year for real estate?''   The relocation has not been without its victims. Though 24 staff will make the move to Singapore, six will be laid off.

  Unisys was negotiating with the Singapore Government for a package that included tax breaks and various incentives towards research and development and training and education benefits, Mr Taylor said.

  Although China remained a focus market for the region, Mr Taylor said the Hong Kong-China unit was big enough and did not require the support of the regional organisation on-hand, as a company new to the region might.

  Although most ''regional'' jobs will sit in Singapore, the Sydney and Hong Kong offices will be retained as operational hubs.

  Hong Kong will be retained as a centre of expertise for the region for the airline industry. The corporation's product engineering group, charged with ''Asianising'' products, will remain in Hong Kong.

  Sydney will continue to be used as the regional skills' base for several product lines. The company has also announced that Sydney will be the development centre for its new fourth-generation language product (4GL), known as LINC.

  Mr Taylor said Sydney was seriously considered as a possible regional base, but that, ultimately, the company had to be closer to Asian markets.

  Singapore was also seen as a better base from which to address the newly liberalised India market, which Mr Taylor believed could become larger than China over the next 10 years.

  Meanwhile, the firm hoped the fall-out from its merged China-Hong Kong operation was behind it. The local Unisys offices were hit by chronic morale problems as changes were implemented last year.

    The new unit is headed by China veteran Fu Kwong-cheung, who has run the Unisys China business since 1988.

  Last year, China was Unisys' fastest growing subsidiary, at more than 70 per cent. Mr Fu said the unit had averaged more than 40 per cent growth annually over the past five years.

  Unisys is still waiting on government approval to set up its US$10-million wholly-owned subsidiary, and has yet to decide where the US$10 million start-up capital will be invested.

  The company is thinking about setting up a PC manufacturing plant in China, as one possibility, to serve the domestic market and other Asia markets.

    Of more interest, though, according to Mr Taylor, would be a software development venture, whereby large development contracts would be undertaken for both local and export markets.



Unisys quits over revamp