The Hindu Business Line : BlueStar Info exits Malaysian venture

LACK of sufficient business volume has forced Blue Star Infotech Ltd (BSIL) to exit from its joint venture in Malaysia. BSIL had set up a joint venture with Mezannine Capital (Malaysia) Sdn Bhd (MCM), an investment company of the Arab-Malaysian group in 2001-02, with the expectation of a sizeable business opportunity.

BSIL has sold its 51 per cent stake in Blue Star Infotech (Malaysia) Sdn Bhd to joint venture partner MCM Technologies Bhd. "Contrary to our expectations, the business volume did not grow significantly over the past three years. On account of this, it was felt that the present volume of business did not warrant the presence of a separate entity in Malaysia as it was drawing considerable management time and attention," the company said in its annual report.

The company planned to pursue future business in Malaysia and the rest of South East Asia directly from India. The company has two other subsidiaries: Blue Star Infotech America Inc and Blue Star Infotech (UK) Ltd. While the UK subsidiary clocked over 100 per cent growth during 2003-04 over the previous year, the US subsidiary grew by 27 per cent. BSIL had a 35 per cent growth in consolidated revenues and 24 per cent increase in net profits in 2003-04.

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