rediff.com: Pentamedia Graphics plans big push in US

Indian multimedia and animation software firm Pentamedia Graphics Limited is set to embark on a big push into the US graphics and gaming markets, the newly appointed head of its US operations said on Wednesday.

"We have just scraped the tip of the iceberg as far as multimedia and animation business in the US is concerned and our strategy will be to build on the credibility that has been established to rapidly grow the business," Ashok Desai said.

Desai said his immediate task would be to quickly put in place the business development and marketing infrastructure as well as to develop a comprehensive three-year business plan.

"There are several areas where we are looking at the business opportunities, including developing new generation interactive content for the growing broadband and wireless Internet and the area of broadcast graphics.

"But the first priority would be to identify projects and firms for joint research and development operations for co-ownership and co-development of products for the sizeable medium size animation and graphics businesses."

He said the second priority would be to tap the tremendous business potential offered by the gaming industry.

"The other area is the games development industry and given the strong animation and the mythological based interactive content development skills we have, we can easily have one product that will give us $3.0 billion straightaway."

Pentamedia, which employs about 700 software engineers and digital artists, is actively involved in animation and special effects for Hollywood movies. It also has specialised skills in audio and video compression technologies.

The Madras-based company expects to go for an American depositary receipt issue later this year, mainly to help acquisitions. Although a final decision is yet to be taken, the listing is expected to be on the NASDAQ stock exchange.

Desai said the firm had yet to take a final decision on whether the US arm would operate as a subsidiary of the Indian firm or a separate US incorporated entity, with its own capital structure.

"What can be said at this point is that whether it be a separate capital structure or raising ADRs to fund acquisitions and other strategic investments be concerned, we will do the needful when the time comes."

He added that the US arm would however conduct its business as any local American firm would.

"The aim is to build a local US company and Pentamedia in the US will run like an American company and not as an Indian company, though it will have the advantage of being able to tap into Pentamedia's Indian resources at any time."

Desai, who previously headed the US-based computer graphics systems maker Silicon Graphics' Asia-Pacific operations, said the size of the US graphics market was roughly estimated at about $20 billion and the firm's aim was to get a larger share of the business. Pentamedia reported a net profit of Rs 1.70 billion ($38.06 million) on sales of Rs 3.93 billion in 1999-2000 (April-March).

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