Hon Hai to Target Green Services, Add China Staff

By TING-I TSAI and WEI YI LIM
TAIPEI -- Hon Hai Precision Industry Co., an electronics manufacturing giant, said it will start offering corporate environmental services to customers and that it is expanding its work force in China by 5% despite a global economic downturn that has hurt its sales.
Hon Hai signed an agreement Wednesday with International Business Machines Inc. to acquire technology used to calculate greenhouse-gas emissions from factories and other corporate facilities. Hon Hai plans to use the technology to help customers monitor their emissions and gather data that can be used as a basis for carbon trading.

Hon Hai Chairman Terry Gou said his company plans to invest $100 million to $200 million in developing such software services in the coming years, though Hon Hai will continue to focus on manufacturing.
Mr. Gou also voiced cautious optimism about the global economy, saying: "In the short term, the economy is not as bad as I initially expected."
Mr. Gou didn't give a time frame for the jobs increase in China, where Taiwan-based Hon Hai has most of its factories. Nor did he specify its current work force in China, but he said Hon Hai's global payroll is about 600,000.
Hon Hai, which started out in the 1970s making television tuning knobs, has expanded into a major producer of electronic gadgets, with parent-company revenue last year of about $42 billion, not including all its affiliates. It now manufactures everything from iPods for Apple Inc. to computers for Dell Inc. to videogame consoles for Sony Corp.
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% 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. It isn't clear what types of clients Hon Hai plans to target, but the service will be first offered in Taiwan, and eventually be expanded to other Asian countries.
Write to Wei Yi Lim at Weiyi.Lim@dowjones.com