Monday, January 24 2005 10:36 Hrs (IST) - World Time -

London: Bangalore-based IT major Wipro plans to make some European acquisitions soon, its Chairman Azim Premji has said.

"We cannot afford to be out of UK, Germany or France - all of which have markets of the same size. Hopefully we will be making some European acquisitions soon," Premji told 'The Guardian' daily in an interview published on Saturday (Jan 22, 2005).

With a customer list that includes Sony, Microsoft, Nokia and Dell, the company has seen profits triple to $ 230 million (£115 million) and sales double to more than $ 1.2 billion during the last four years.

Its latest third-quarter results, published, show a jump of 60 per cent in profit. Wipro's ability to insert itself into the world's corporate DNA has made it a name recognised in boardrooms from New York to Tokyo, the report said.

Premji owns 83 per cent of Wipro, currently valuing his holding at $ 10 billion. Answering a question on why business comes to Wipro, Premji pointed to the large pool of English-speaking, technically trained graduates whose pay packets are considerably slimmer than their contemporaries abroad.

"Wipro can choose from 2,80,000 engineering graduates every year, with another 2,00,000 college diploma-holders who are easily trainable. In the United States annually there are just 50,000 engineering graduates.

In fact colleges produce more sports therapists than engineers," Wipro's chairman said.

Education, Premji said, is the fuel that drove India's growth. But he knows that while there has been investment in higher studies, there has not been the same commitment to primary education.

The result is that a third of the population over the age of 15 has no schooling, the report observed. So the Azim Premji Foundation, a not-for-profit organisation, which spends $ 5 million a year, focuses on improving India's elementary education.

"We are not like China, where this could be done through legislation. People have to take control of their own lives. Education is key because it also raises other social indicators like healthcare."

Despite his emphasis on the pressing need for better public services in India, Premji dismissed any idea that India would lose out. The most serious industry concerns, such as rising wage levels or burnout rates among young workers did not bother Wipro.

"Attrition levels are going up in America. With Sapient or Accenture, you see attrition rates of 17 per cent. It is in America where we see a real shortage of software engineering and it is getting harder to send people over," said Premji.

"Visa restrictions are going to have to be watched very carefully." Answering a question on outsourcing, the Wipro chief said the issue has given the software industry in India exposure "a billion-Dollar campaign could not buy."

He said that the process of outsourcing is inevitable - just as Britain lost its manufacturing base because there were better places to do it. "It is healthy. Companies have become more competitive globally."

"You are looking at productivity increases of at least 4 per cent a year for five years, and half of that gain is from IT. From that point of view, we help." Rather than being cowed by the controversy, Premji thinks Europe could do with his company's help.

"The UK and the US are quite similar in that they have high productivity, English-speaking workforces who don't mind working long hours. Working in those countries is not a problem." He said that the culture in Europe was different.

"For example in France, you can't work more than 35 hours a week. It does not help investments." At the same time, he made it clear "we cannot afford to be out of UK, Germany or France - all of which have markets of the same size."

As Wipro has entered new fields, it has found the big players move on - beaten by Indian companies' cost and competency. Now Premji aims to overhaul the very largest consulting groups in the world, all of whom have deep pockets and armies of professionals already embedded in blue chip companies.

"Our competition is increasingly from Accenture, IBM, Cap Gemini and EDS," said Premji. "They are the most aggressive in business, and really in the future they are the people to watch."