Unisys sets up outsourcing operations in China

Unisys has set up a software development and outsourcing services center in Shanghai, the opening move in its bid to establish a large outsourcing business in China, a company executive said Friday.

"We wanted to set up a presence in China where we'd be able to have access to a lot of multinational clients," said T.C. Kong, managing director of Unisys Global Services China.

The outsourcing center will provide a range of services, including open-source software development and technical help-desk operations, Kong said.

Although labor costs are higher in Shanghai than other Chinese cities, the large number of multinationals based there was a major factor when selecting a location, Kong said. In addition, the Shanghai government and a local science park offered Unisys incentives that included "many months" of free rent and generous tax breaks that will last several years.

"As we speak, the vice superintendent of the Pudong [District] tax bureau is in my office with my finance manager trying to work out more favorable incentives for us," Kong said.

Unisys has big plans for its China center. Currently, the company has 10 employees working at the Shanghai outsourcing center, Kong said. Over the next three years, it plans to hire 1,000 workers to staff its Chinese outsourcing operations. "We've just started recruiting," he said.

Many of these new employees will be based in Shanghai, while Unisys will look at expanding its outsourcing operations to other cities in China. The existing center is big enough to house 250 workers and Unisys has an option to lease another building, which is big enough for an additional 300 employees, Kong said.

The Shanghai center is the second outsourcing center that Unisys has established. The company's first center, in Bangalore, India, opened in 2004, he said.