Nearshore Americas

Exclusive: As India’s Minacs Goes Global, It’s a Full Speed Entrance into Latin America

Aditya Birla Minacs has embarked on a rapid expansion drive into Latin America, as the India’s sixth largest BPO provider presses ahead to get closer – literally – to its North American clients. Minacs made its first foray into CALA when it opened a delivery center in Jamaica, a few years ago, through a partnership with Global Gateway Solutions.  Now the BPO provider says it is launching three more delivery centers in Mexico over the next six months.

“We have purchased an expansive office space in Mexico City and are gearing up to start operation in a month or two,” said Minacs’ CEO Deepak Patel in an interview this week.

Minacs, according to him, has identified two more places in Mexico –– one in Guadalajara and another in Monterrey. “We are negotiating with potential partners there. But I am certain that both these offices will be up and running over the next six months,” Deepak added.

The Bangalore-based firm, whose revenue increased to $375 million in 2011 from $312 million the year before, is also seeking locations in the Dominican Republic and Costa Rica.

The firm is also expanding its operation in Jamaica, following a major  deal with Postmedia, a Canadian media and newspaper publisher. Postmedia recently shut down its contact centers in the Dominican Republic and handed the task of running the call center to Minacs.

According to Deepak, Minacs will continue to run the contact center in Canada for the time being but will shift the operation to Jamaica over the months  to come.

In Latin America, the company has formed a team dedicated to site selection. Officials say the team is bound to shortlist three more locations in the coming months.

It is becoming increasingly certain that most of these nearshore centers will cater to the company’s North American clients, and a majority of them will offer voice-based services.

“Countries like the Dominican Republic and Costa Rica are a bit costlier than India. But that doesn’t matter. We are looking at other values such as time zone alignment”

Acquiring and Partnering

Minacs, which derives 90 percent of its business from North America, is also scouting for acquisitions in Latin America. The company started offering IT services after it acquired PSI Data Systems in 2009. It went on to buy London-based Compass BPO to add finance and accounting services to its portfolio. In the same year it acquired the Minnesota-based Bureau of Collection Recovery to add accounts receivables management and collections services to its portfolio.

“The first option is to look for partners,” Deepak said, adding that his company would launch delivery centers on its own if it failed to search out right partners.

For Minacs, much of its business comes from the manufacturing industry. “We are the biggest BPO service provider for the automobile industry in North America,” Deepak claimed.

The Indian firm grew its order book to $775 million during the course of 2011, and now the company says it has more than one billion dollars worth of contracts in the pipeline.

Interestingly, Minacs insists that BPO operation is 10 percent cheaper in Latin America than in India.

“Countries like the Dominican Republic and Costa Rica are a bit costlier than India. But that doesn’t matter. We are looking at other values such as time zone alignment,” Deepak said. The Minacs’chief, however, ducked a direct question on whether lack of skilled labor might hamper his company’s expansion in the region.

But analysts say its margins are still not comparable to its Indian peers and the current expansion in nearshore regions might reduce the margins further.

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Minacs was formed in 2007 with the merger of TransWorks, an Indian BPO company and Minacs, a Canadian CRM Services company. Today, it has over 20,000 employees operating from 36 centers in three continents across the globe. The BPO firm has now set a target of making revenues of one billion dollars by 2013.

What is interesting is, while most of India-based outsourcers are focusing on non voice-based services, Minacs is looking to expand its voice-based services. “A few years ago, voice-based services accounted for just 20 percent of our business and now it makes up about 40 percent. We want to focus more on voice-based services,” Deepak said.

That’s the fundamental reason why the company is expanding into Philippines and Jamaica, according to industry analysts in Bangalore.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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