Byte Power Group to set up China Subsidiary

Stan Beer
Friday, 29 October 2004 18:56

IT Industry - Development

Byte Power Group Limited (ASX:BPG) will be setting up a new subsidiary in China. The new Byte Power subsidiary will be created to primarily assess and execute the e-kiosk internet network project which was announced to the market on 1 October 2004.

BPG's Hong Kong subsidiary signed an MOU to set up a joint venture with a Chinese company to roll-out an e-kiosk computer network of 1000 kiosks in Zhengzhou, the capital city of Henan Province, China. The roll out of all kiosks is expected to be completed over 2 years. The project will run for 10 years and will then be transferred to the Chinese Government. Total revenues over the life of the project are estimated at$62 million.

BPG CEO, Alvin Phua, said the China subsidiary will allow the group to manage the growing opportunities in China directly and enable it to create direct relationships with local companies. The new subsidiary will build on the work already underway with the Hong Kong subsidiary and allow further growth in the Chinese IT&T sector.

Prior to commencement of projects, BGP will seek to enter into formal heads of agreement with its Chinese joint venture partner, with a view to documenting the terms and structure of the joint ventures.

The new China subsidiary will be a joint venture between Byte Power and potential equity partner Dragon Zhang, who is currently the director of Zhengzhou Modern Logistics Center Co. Ltd and has business interests in the areas of Logistics, Investments and Education Exchange between China and Australia.

Zhang was the chief representative of a government foreign trade and food export agency in Australia from 1992 to 1995. Mr Zhang brings a high degree of local knowledge and a wide range of contacts to the China subsidiary. He said Henan province had high expectations for the e-kiosk
project and was committed to its success.