Hon Hai Moves Into Environmental Services

By TING-I TSAI
TAIPEI -- Hon Hai Precision Industry Co., the world's biggest contract manufacturer of electronics by revenue, is expanding into the business of corporate environmental services.
Hon Hai has agreed with International Business Machines Inc. to acquire technology used to calculate greenhouse gas emissions from factories and other corporate facilities, the two companies said in a statement.
Taiwan-based Hon Hai, which started out in the 1970s making television tuning knobs, has expanded into a wide range of electronics products. It now manufactures, on a contract basis, everything from iPods for Apple Inc. to desktop computers for Dell Inc. and videogame consoles for Sony Corp., and is one of the biggest manufacturers in China, where most of its factories are located.
Developing new lines of business has become more urgent in the last year, as its revenue began to stall after years of rapid growth. In January, Hon Hai reported its lowest single-month revenue in 20 months. January sales fell 12.1% from a year earlier as its international clients cut orders.
Under the new contract, Hon Hai will use GreenCert, a combination of software and other technology jointly developed by IBM, Enterprise Information Management Inc., and C-Lock Technology that analyzes carbon emissions. Customers can use that data as a basis for carbon trading, IBM says.
Hon Hai will base its environmental services operation in the southern Taiwan port city Kaohsiung, and will employ several hundred engineers, according to IBM. The service will be first offered in Taiwan, and eventually expanded to other Asian countries.
It isn't clear which types of clients Hon Hai plans to target for the new services. Hon Hai declined to elaborate.
Write to Ting-I Tsai at ting-i.tsai@wsj.com