July 19, 2005

In 2005, IBM will cross the US$5 billion cumulative mark in B2B procurement out of Singapore, for routing thousands of electronic components, memory chips, hard drives, LCD screens, sub-assemblies and other hardware components from its Singapore Trading Centre (STC) that Big Blue set up there in 1997.

'We routed about US$5 billion worth of components through the STC between 1997 and end-2004,' IBM's Tokyo-based president of Asia-Pacific, Frank Kern, told BT in an interview.

'Singapore is one of IBM's two global procurement centres and is crucial to the company's global manufacturing operations. The STC handled 80,000 electronic transactions as at Dec 31, 2004. It is not IBM's policy to project what we're likely to do in business this year.'

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However, as the global economy expands and IBM's hardware business grows, the STC will also expand its business. As at Dec 31, 2004, of the US$96.2 billion in overall annual revenues, Big Blue's hardware sales amounted to US$28 billion.

The Armonk, New York headquartered giant has 329,000 employees and does business in 170 countries.

Singapore is IBM's Asean and South Asia HQ, and manages operations in seven countries - Singapore, Malaysia, Indonesia, India, Thailand, Vietnam and the Philippines. The company has manufacturing facilities in Singapore, China, Thailand, Japan and India.

The STC works like an electronic components' exchange and is part of IBM's strategy to create hubs to take advantage of specific skills and capabilities.

'Singapore fits very well into our global enterprise strategy,' he said. 'We did an internal survey and found out that we have invested US$136 million between 2000 and 2004 in Singapore in 10 competency centres either on our own or with our business partners. The STC is one such centre.'

Singapore also hosts IBM's Global Logistics Centre, its Global Treasury Centre, Open Computing Centre, Asia South Customer Solutions' Centre, Asia RFID Solution Centre, and the Business Continuity and Recovery Centre, among others. 'We have more than 3,000 employees in Singapore and over 70,000 across the Asia-Pacific and Japan,' Mr Kern said.

'Singapore is a high-skill, high-value location, and as a hub it is very attractive for us.' Singapore has also emerged as IBM's global hub for high-end tape drives manufacture and support.

'Singapore is responsible for assembly and test of IBM's enterprise tape drives, as well as two new products - the Scallop and the DS6000 drives,' he said.

'IBM's international warranty repair centre for tape drives is now in Singapore.' Mr Kern took over as head of IBM Asia-Pacific, on April 1, 2003. He is also a member of IBM's Worldwide Management Committee.

The Asia-Pacific-Japan region contributed US$21.27 billion last year (up 10.1 per cent) to IBM's US$96.2 billion (up 8 per cent) in global revenue.

Source: IT Asia One