|
NEW
York-based business process outsourcing (BPO) firm
ExlService Holdings Inc. said it expects capital
expenses for its Philippine operation to hit $10 million
(approximately P420 million) this year.
In a
conference call on May 7, EXL chief executive Rohit
Kapoor said they “expect capex for the year will be $20
million, half of that amount related to the Philippine
operations.”
The
company has already spent a portion of this as
executives said that expenditure for the quarter ended
March 31, has reached approximately $6.8 million, “with
a significant portion of those capex related to our
Philippines operations center.”
Executives said startup costs have totaled nearly a
quarter of P1 million ($7,000).
EXL’s
new center, which opened in April with 900 seats, is
part of the company’s decision to expand overseas. This,
as the greenback continues to weaken against other
currencies, specifically against the Canadian dollar.
EXL is closing centers in North America amid as a
sputtering US economy pressures companies to reduce
costs.
This
environment has hiked EXL’s cost and pricing strategies
in the Philippines, executives said.
“Clearly
at that time, since we decided to make an investment in
the Philippines, the peso has appreciated against the US
dollar and therefore, our investment into the
Philippines in terms of building out the infrastructure
has increased,” Kapoor said.
“At the
same time, the pricing that we can offer to our
customers for the Philippine operation has also
increased.”
Kapoor
added that with such environment, they would be
“careful, in terms of the type of customer contract and
the type of pricing arrangement that we enter into with
clients that get serviced to our Philippine location.”
Currently, EXL said the Philippine center has an
insurance provider as client.
“We
continue to position our Philippine operation as a
domain-centric voice and back office capability.”
The
company said its Philippine operations will focus on
volume and “reach normal operating capacity by early
2009.”
EXL’s
startup in the
Philippines
came before property consultancy firm Core Net Global
Inc. cited Manila as the fourth “submerging market”
destination for BPOs, after the three cities of
Bangalore, Hyderabad, and Chennai in India. It added
that the top 10 emerging market destinations for BPOs
today are led by Belfast, United Kingdom and Xi’an,
China.
The
company said Manila and India cities are becoming
has-beens in selection for BPO sites because “rising
costs, labor shortages and high turnover now plague
[such] cities.”
“Executives are looking for solid infrastructure, a
bilingual labor pool, colleges and universities creating
an emerging talent pool, and the presence of a few
foreign companies to lure new development should
consider smaller metro areas for new plants, call
centers and IT hubs,” the firm said.
Kapoor
said that EXL will operate its Philippine center along
“structures which we are used to doing in
India
where we typically charge for process training and where
we will share some of these startup cost with our
customers.” |
