SVA-Intrusion Co Ltd, a Sino-US data communication joint venture, is expected to increase its investment to augment market share at home and abroad although it has only been in operation for a little more than a year.
"The market for switches and network security products has great potential and the company is eager to make further investments in this area," said Huang Feng, general manager of SVA-Intrusion.
The investment is expected to be about the same as the initial investment in the venture between Shanghai Video and Audio Group Company (SVA) and leading US network security products provider Intrusion.
The venture, which went into production last year, involved an investment of 170 million yuan (US$21 million), with SVA taking a 70 percent stake and Intrusion 30 percent.
The venture is SVA's first move to shift its business from audio and video (AV) products to IT industry. It purchased patents for key technologies from Intrusion to make it competitive both at home and abroad, said George Zhu, SVA-Intrusion's marketing department manager.
SVA has been cooperating with many multinational companies such as Sony, JVC and Siemens in joint ventures, but these are just manufacturing ventures, and have no patents for key technologies.
"We have negotiated with many companies, but only Intrusion has agreed to sell us its knowhow," Zhu said.
"Having such sophisticated technologies makes it possible for us to win out over our rivals."
Currently, some of its products are sold in the Republic of Korea, Israel and Europe and discussions are under way to expand into the Japanese market.
"Sales are promising but competition is fierce," Zhu said. The competition comes mainly from multinational companies, firms in Taiwan Province and small enterprises in South China.
Statistics show that data communication market will grow by 25 percent to 40 percent annually and network safety products by 120 percent.
Huang said the venture is expected to reach sales of about 200 million yuan (US$24 million) this year, which will be doubled within three years.
He said SVA will launch another joint venture with Taiwan-based Accton in the city's southwestern Xinzhuang area with a co-investment of US$18 million, SVA putting in 60 percent and Accton the remaining 40.
(China Daily May 22, 2002)
