Seagate set for Asian growth

Seagate set for Asian growth

BANGKOK (Reuter): Asia is a booming region for the computer industry, and Seagate Technology Inc president and chief executive Alan Shugart said yesterday he has high hopes for continued strong growth in the region in the coming years.

"In five to 10 years from now, I think the Asia-Pacific region will be about 30 percent of our revenues," Shugart said. "It's really the fastest growing part of our market."

In the second quarter of the year the region accounted for about 16 percent of U.S.-based Seagate's US$2.4 billion revenues, he said.

While the European market has leveled off, and there is only slight growth in North and South America, Seagate hopes to benefit from growing prosperity in Asia.

The company has also set itself a lofty goal of increasing its global revenues to $19.5 billion by the year 2001.

"I call it the Seagate Odyssey," said Shugart, one of the five founders of the company. "My goal for the company for the year 2001 is to have revenues of $19.5 billion."

Seagate, the world's largest independent disk drive maker, had $8.6 billion in revenues in the year ending June 28, 1996. For the first half of the 1996 fiscal year to December 27, it reported net sales of $4.46 billion.

Shugart would not project earnings for the company, saying only that "business was good" in the current quarter and he expected the computer industry to stay strong this year.

"It looks to me like the computer industry should be strong for the whole calendar year," he said.

In the second quarter of the year Seagate continued to operate on allocation, with demand greater than supply, Shugart said.

The company reported a profit of $1.36 per share or $341.96 million for the first six months of the year, up from $1.14 a share or $269.72 million the same period last year.

Seagate has a large production operation in the Asia-Pacific region, focused mainly in Southeast Asia.

The 19-year old company is the largest private employer in Thailand, Singapore and Malaysia with a total of 79,000 employees in the three countries. The company also has operations in Indonesia, the Philippines and China.

In Thailand alone it expects to expand to 50,000 employees by the end of the century from 37,000 currently. Seagate says it has been the number one exporter from Thailand since 1991, representing about 3.5 percent of the country's total exports.

Seagate just announced a plan to invest $70 million to expand its computer disk drive recording head manufacturing facility in the Philippines.

Shugart, who is in Thailand to officially open the company's sixth plant -- a state-of-the art magnetic recording head plant -- said he plans to continue to expand throughout the world.

He would not say which country he has targeted next, but said he plans to keep growing the company.

"In the past 17 years we have produced 100 million disk drives. We think we'll produce the next 100 million in three years," he said.