Tata Consulting Services (TCS) intends to create a long-term footprint in SA and sell 25% of its shareholding to a local black economic empowerment (BEE) partner.
The company is part of the $29 billion global Tata Group, which will invest R3.5 billion in its South African business. TCS focuses on IT consulting, software development and business process outsourcing.
Speaking at the company`s launch, in Johannesburg, last week, TCS COO Natarajan Chandrasekaran said SA is a key strategic market for the India-based conglomerate. He noted the local subsidiary will operate in all sectors of industry, including telecommunications, financial services, manufacture and public service.
Training boost
The Tata Group already has a presence in SA through multiple firms, including Tata Motors, Tata Steel and Videsh Sanchar Nigam (VSNL). VSNL holds a 26% stake in SA`s second national operator, Neotel.
Chandrasekaran noted the IT services, business solutions and outsourcing company also considers SA as a gateway into sub-Saharan Africa. TCS now has a presence in 10 African countries, including SA.
TCS CEO Subramanian Ramadorai and Chandrasekaran stressed the South African business would mostly use local talent to deliver services as they see localisation and long-term local investment as critical.
"We will be recruiting people, we will be training people, we will be transferring skills," says Chandrasekaran.
While he would not provide details about the number of people who would be trained in a year or in the medium-term, he said the company is aiming for "rapid growth".
TCS is already involved in deputy president Phumzile Mlambo-Ngcuka`s Accelerated and Shared Growth Initiative SA, said Ramadorai.
Empowered to grow
Commenting on the local subsidiary`s BEE ambitions, Ramadorai said TCS will sell 25% of its equity shareholding to an empowerment firm.
TCS would like to complete the transaction as soon as possible, he explained, but declined to identify potential partners. The company, he said, is "in discussions".
Ramadorai noted that TCS has had an indirect local presence for 12 years, delivering services through local partner Conscripti, an IT solutions and services company.
However, in 2002, co-partner Dimension Data acquired additional shareholding in Conscripti, bringing its shareholding to 80%. This prompted the company to enter the South African market directly, which would allow it to expand its local business and client base more rapidly.
TCS is India`s largest IT company, with revenues of US$4.3 billion and over 100 000 IT consultants in 47 countries. It is listed on the National Stock Exchange and Bombay Stock Exchange in India.
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