IBM Moves Key U.S. Unit To China

Oct. 12, 2006
First time an IBM headquarter office is located outside U.S.

IBM said Oct. 12 it was transferring its chief purchasing operations to China, a move that highlights Asia's growing importance in the global supply chain. The decision to transfer its chief procurement office from New York to Shenzhen marks the first time the headquarters of a global IBM division has been located outside the U.S., the company said.

The leading American technology and software group began shifting its Asia-Pacific headquarters from Tokyo to China's commercial hub of Shanghai in 2004, a process it completed earlier this year.

It also has major research, software, hardware and computer services operations in India which make it that nation's sixth largest technology-related employer.

The addition of its global procurement office to Shenzhen, where it has operated for over a decade and many of its 1,850 employees in Asia are based, is aimed at reshaping the company's supply base in the region. IBM collaborates with 3,000 suppliers across Asia that account for about 30% of the $40 billion IBM spends on annual procurement. "The demand for software and services skills -- across Asia and worldwide -- is growing," said the group's global procurement chief John Paterson. "To meet the demand, it will require developing relationships with new partners and suppliers and working with existing ones to help them build skills, processes and management practices to compete globally in the services market." IBM, once a leading hardware maker, struggled to transform itself over the past decade into a software producer but now earns about half of its revenues from outsourcing and IT consulting.

Copyright Agence France-Presse, 2006

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