Demerger to help focused business operations

In his maiden interview following the company’s demerger, D-Link (India)’s CEO and managing director, Jangoo Dalal talks to Pankaj Maru of Cyber Media News about the aim of demerger, its impact on business and growth potentials in networking market, along with focus on R&D and Green IT. Excerpts :

Recently, D-Link announced its de-merger that will split the existing company into two entities with separate businesses. Can you brief the main reason for the de-merger and the future plan of the two companies?

In India, besides sales and marketing of active networking products, D-Link is also engaged in other activities that are quite unique compared to D-Link operations globally. These include manufacturing, R&D and service of networking products as well as sales and service of Passive (SCS) products.

In the Indian context the Business Operations of Active and Passive Networking were in a ratio close to 50:50.

Keeping in mind the interest of the two distinct business segments, it was becoming increasingly necessary to focus on the two as both were quite different businesses - one being the D-Link brand business which basically comprises products from D-Link head quarters and the second being the passive products business developed by the local R&D and manufacturing.

Considering the growth potential in R&D and manufacturing in India, the Board took the demerger decision. Post completion of the steps involved in the demerger process, the new D-Link (India) will have the business of sales and marketing of D-Link branded active networking products.

And the renamed company, Smartlink Network Systems Ltd. will have the business of manufacturing, R&D, sales and service of networking products and sales and marketing of entire range of Copper & Fiber (passive) structured cabling products.

We believe that the demerger will result in focused business operations of the two companies and allow them increased flexibility in taking advantage of the huge growth opportunities in their respective business segments.

Smartlink will drive both captive and contract manufacturing businesses at its ISO 9000/14001 certified plants in Goa; R&D at its world-class centre in Bangalore with specific focus on VoIP and Routing products; design and development, manufacturing, marketing and sales of branded Digi-Link passive structured cabling systems and provide nationwide service and support for networking products.

To summarize, we are quite excited about the growth opportunities for both the companies and believe that this step would benefit all the stakeholders.

Do you think D-Link’s de-merger strategy might open a window to rival companies that could break into the D-Link’s strong forte of networking business and thereby affect its market position?

Not exactly. In fact demerger is plan to bring sharper focus to the two distinct set of activities that is active and passive networking business and to target market and competition with laser sharp vision.

Demerger will allow both companies to chart independent long-term strategies. This will lead to accelerated growth of the businesses of both companies.

India represents one of the fastest growing markets for networking products and a strong focus on development of this business will further accelerate the growth in the healthy market share that both D-Link and Digi-Link brand products enjoy in India.

Why your company moved out of the motherboard segment and sold the business to Gigabyte Technology. Was the motherboard business not doing well compared to networking business?

We moved out of motherboard business to lay more focus on our core business of Networking, as we believe there is huge business opportunities in networking market to tap and will take care of our business goals.

In IT business, innovation is one of the key factors to company’s success and its market spot. So, how important is innovation to D-Link and how much it spends on R&D of new technology and products?

We are making advances in our R&D initiatives with homegrown products that are made to suit the needs of the Indian consumer. Our team of innovators is highly sensitive to the needs of the new Indian customer, who is more aware, demanding and progressive than ever.

Accordingly, we modify existing products and develop new ones by bringing global technologies to the country. We are now looking forward to roll out our indigenously developed products such as the Service Gateways, Voice-over IP and Video IP phones.

Given the increasing demand for these IP telephony products, we anticipate these products to perform well. We have also recently launched a ‘Made in India’ fully featured Videophone. This videophone incorporates cutting edge technology at affordable prices.

Green IT has become phenomenally significant. Are you taking any major steps in this direction, keeping in view your social and environmental responsibilities?

D-Link is the first company worldwide to market the Green Ethernet technology, which enables intelligent, automated power reduction on specific, green optimized switches. Today 100 per cent of the D-Link and Digi-Link product range are RoHS compliant.

Our principles of sustainability extend beyond our organization, towards our natural habitat. We let our concern show by complying with various environmental necessities in our manufacturing processes.

We are pleased to inform you that we have now taken the first step forward, in bringing environment-friendly technology to the market. Our state-of-the-art manufacturing plants at Goa are RoHS compliant.

Our manufacturing teams also strive to reduce the non-biodegradable materials in our products.