Moscow-based Sitronics, the LSE-traded, high-tech arm of the diversified Russian conglomerate Sistema, is ready to ink a pact with the second-largest Chinese telecom equipment maker, ZTE, to open a research and development center on the outskirts of Beijing, Russian news agency RIA Novosti reported on Wednesday, citing Sitronics’ vice president Irina Lanina.
The R&D facility will be part of the 51:49 joint venture between Sitronics and ZTE that has been in operation since 2008, Lanina added. The new center will develop various telecom equipment including RFID (Radio Frequency Identification) systems and end-user solutions that employ Russia’s national GLONASS satellite navigation system. The two companies intend to sign the term sheet for the new venture later in June, Lanina specified.
Sitronics did not disclose the amount it will invest in its Chinese R&D center, only noting that it would allocate 5% of its 2011 revenue for R&D. Based on this figure and the forecast for Sitronics’ revenues in 2011 ($1.28 billion, up 10% from 2010), Russian business daily Vedomosti estimates Sitronics could invest up to $64 million in R&D in 2011.
The total sum alocated for Sitronics’ R&D spending will be spread among several of its R&D centers, including those in the Czech Republic based on the R&D facilities of Czech firm STROM Telecom that Sitronics bought in 2004, in the new Chinese facility, and in two yet-to-be-opened engineering centers in St. Petersburg and Krasnodar.
