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TIE-UP IN INFORMATION SYSTEMS BUILDING AND OPERATING SERVICE BUSINESS -- Hitachi Acquires Majority Holding in Showa Denko Computer Service Co. -- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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On September 10,1999, Hitachi, Ltd. (NYSE:HIT) and Showa Denko K.K., announced that they have entered into a basic agreement under which Hitachi will become a majority shareholder in Showa Denko Computer Service Co., Ltd. (SCS), Showa Denko's wholly-owned information processing subsidiary. On October 1, SCS will restart operations as a member of the Hitachi Group, provisionally renamed Hitachi SC Co., Ltd. (HSC). HSC will carry on SCS's business operations, involving performing information processing on an outsourcing basis for Showa Denko and the member companies of the Showa Denko Group, the sale and development of software, consulting, and other such information system building and operating services. HSC will also focus on providing solutions for other companies outside the Showa Denko Group.
For enterprises faced with stiff competition, concentrating management resources on their core competencies has become major focus. At the same time, however, in order to compete, companies also have the task of having to incorporate systems based on the latest information technology. This has led to a steady increase in the use of outsourcing companies to develop and run such information systems. As part of a move to strengthen its service business, Hitachi is pushing forward with the expansion of related operations by entering into alliances with leading enterprises in each area of industry. HSC will be strategically positioned to serve the chemicals industry, using the advanced expertise and high level of personnel resources and information processing technology built up over the years by SCS to provide the Showa Denko Group and the chemicals industry in general with solutions to their information processing requirement. In 1984, Showa Denko established SCS as a wholly-owned subsidiary for carrying out information processing work for Showa Denko and the Showa Denko Group. In the same way, these companies will be able to use HSC to meet their information processing requirements on an outsourcing basis, thereby enabling them to increase efficiency by channeling management resources into their areas of core competency. Under the agreement between the companies, Hitachi will hold 55.6% of HSC stock, with Showa Denko holding the remaining 44.4%. HSC will be run jointly by the two companies. The synergy between the systems expertise built up by SCS in the chemicals sector and Hitachi's information technology infrastructures, will be used to provide high quality, highly competitive information systems implementation and operating services. One of HSC's main contracts involves the construction and operation of an SAP R/3 system for Showa Denko. Looking ahead, this will be utilized to attract new customers from among the ranks of Showa Denko Group companies as well as other companies within the chemicals sector. * SAP and R/3 are registered trademarks of SAP AG.
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WRITTEN BY Secretary's Office
All Rights Reserved, Copyright (C) 1994, 1999, Hitachi, Ltd.