Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):
Germany's SAP Allots $1 Billion For India Growth
Summary: SAP AG chairman & CEO Henning Kagermann said his firm will invest $1 billion in India over the next five years in order to expand its operations there. Mr. Kagermann speculated that "most of it will be on people." SAP currently employs 2,750 in India with plans to increase this number to 3,500 by December and double its Indian work force during its five year investment period. SAP has invested $500 million in India to-date since it began operations there in 1996. SAP however, isn't the only global tech company targeting India. In June, IBM Corp. announced a tripling of its investment to $6 billion over three years. Microsoft Corp. said last December that it plans to double its work force with a $1.7 billion investment over four years. And around that time, Intel Corp. announced a $1 billion investment plan.
Comment on related stocks/ETFs: SAP AG has ADRs listed on the NYSE under ticker: (NYSE:SAP). During its Q2 earnings conference call on July 20th, Leo Apotheker, member of SAP's Executive Board, mentioned that SAP continues to do a great job penetrating growth markets in Asia Pacific, particularly in China and India. "We usually don’t disclose the exact numbers there, but just to give an indication, in countries such as India and China, our growth rates are either big double-digit, and in one of the two cases actually triple-digits." A Bloomberg.com article covering SAP's India investment story stated, "The number of engineering graduates in India is expected to rise 50 percent to 536,000 a year by March 2008." Rival Oracle Corp. (NYSE:ORCL) said in June it plans to continue investing in India and increase its 9,500 employees there. The article also said Indian software centers represent SAP's largest facility outside of Germany. In its second quarter, SAP reported a 43% increase in net income while maintaining its full-year guidance.