Following the announcement of an agreement struck last November with Hitachi Europe Limited, JSE-listed e-commerce enabler, Zaptronix Limited, announced today that Hitachi will acquire 27% of Zaptronix through the subscription of 39,001,859 ordinary shares. Zaptronix will benefit from a R16m cash injection, whilst Hitachi`s 27% stake will give the electronic giant a technological edge in sharing Zaptronix`s development and e-commerce expertise in both its local and offshore operations.
The collaboration between the two companies stems from the development of KidCard, the first card designed specifically for the younger generation, and the launching of a Europe-based transaction processing and call centre in cooperation with the Safety First Company of Norway. In order to use KidCard on the Internet, Safety First Company identified the need for unique, secure PC-based smart card devices. To meet this challenge, Hitachi Europe and Zaptronix have developed devices based on advanced digital metering technology that will provide exciting new possibilities for a wide range of Internet and real world payments.
In terms of the agreement, Hitachi and Zaptronix will work together to develop a range of smart commerce solutions. These will include low cost POS terminals and Internet kiosks for retail and applications targeted at the public sector. Zaptronix will design devices, which deliver secure content over virtually any medium including CD and DVD, CATV, satellite, or multicast, as well as interactive data networks such as the Internet. The companies expect to deliver over 1 million devices across EMEA over the next twelve months.
Zaptronix is a leading designer and manufacturer of smart card based devices, peripherals and systems. The company is active in numerous e-commerce initiatives, providing hardware, such as kiosks, terminals and other client-side devices, as well as the design and supply of middleware and back-office software, Internet-based loyalty and related smart card systems. Zaptronix recorded an interim net profit of R6,1 million on a turnover of R18,2 million, with attributable profit coming in at R3,9 million at the end of October 1999.
Excited about the opportunity to cooperate with such an internationally recognised technology brand, chief executive of Zaptronix, John Heath stated, "The relationship with Hitachi is part of a bigger picture for both companies. Zaptronix`s design and manufacturing abilities and `first to market` approach, together with Hitachi`s complimentary technologies and existing global market penetration makes for exciting prospects."
The 1999 Fortune Global 500 companies list ranked Hitachi 24th in terms of revenues, with revenue of $65,9 billion for the year ended 31 March 1999. In addition, they were ranked the third biggest electronics company globally after General Electric and Siemens. Hitachi has assets in the order of $81,7 billion and has 300 000 employees. The company manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment and is one of the worlds leading producers of smart cards.
Ian Tait, Executive General Manager, Information Systems Group, Hitachi Europe Limited, says, "Taking an equity stake in Zaptronix demonstrates our commitment to this fast growing region and especially South Africa. Our experience in delivering smart commerce solutions coupled with Zaptronix`s ability to provide flexible solutions for secure Internet payments and loyalty systems, further strengthens our ability to deliver lifestyle solutions and services internationally, especially across the EMEA region. We see the type of secure Internet devices we are developing with Zaptronix as a $1billion industry over the next three years.
Hitachi IFG recognises that the demand for smart commerce solutions has increased as the African Renaissance gathers momentum. We see this relationship as a way of enhancing our delivery mechanisms to ensure that customers receive the high level of choice and service they demand," says Tait.
Hitachi is the dominant player in the emerging Mondex ecash arena and is a shareholder in MAOSCO, the company that owns the intellectual properties pertaining to Mondex. Mondex, a division of MasterCard has been endorsed by the World Bank as the ecash system of choice in the COMESA region comprising some 20 central and east-African countries.
The deal emphasizes Zaptronix`s already impressive credentials in the smart card industry and the solid foundation it has built in a relatively short space of time, despite the `doom and gloom` of the JSE and especially the Venture Capital sector.
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