Dec 21, 2006RFID tag and interrogator provider Alien Technology is establishing a new division in Korea—Alien Technology Asia—to take advantage of the growing Asian market in radio frequency identification. With the support of private investors, says Keith McDonald, senior vice president of sales and marketing, the company intends to spend $10 million over the next several years on facilities, personnel and operations for the new venture. This will include an Alien RFID Academy training program.
In the summer of 2006, the company first announced, then postponed and subsequently called off its plan to launch an initial public offering (see Alien Cancels IPO Plans). At that point, says Linda Prosser, vice president of corporate marketing, the manufacturer decided its "growth will come through private investment." Since then, she says, Alien has received some additional private funding. "We will continue in that process," she says, though she cites limitations in public disclosure, prohibiting her from naming investors. "We are planning to secure local investment in Asia into this new location," says McDonald, though he, too, declines to name the investors.
Alien Technology Asia will open in the first quarter of 2007, focusing on sales, distribution, marketing, research and development, and manufacturing efforts for the RFID market in Korea and China, and throughout Asia. Alien chose to locate the site in Korea's Songdo Incheon Free Economic Zone (IFEZ) because of its central position in Asia, says McDonald—all major Asian markets are within a two-hour plane ride of that site. The Songdo IFEZ, designed for international business and the high-tech industry, is a self-sufficient area offering housing, transportation, an international business center, schools and banking.
Alien already has business in Asia, says McDonald, in the airport, agricultural, transportation and general supply chain markets. However, he is unwilling to name specific clients. "What's difficult is doing that from California," he says. "There are many aspects to implementation, including identifying a solution and accomplishing that solution." That kind of service, he notes, requires a greater presence in Asia. "You need to have your feet on the ground there." Asian countries with specific and unique regulations need a more local service, he explains, adding, "One reader does not fit all—we need to be involved in the piloting."
The Korean facility will be the third permanent site of the Alien RFID Academy, also scheduled to open in the first quarter of 2007. The other permanent academy sites are in Morgan Hill, Calif., and Dayton, Ohio (see Alien Opens Dayton RFID Lab). According to McDonald, those academies serve end-user corporations, systems-integration companies, college students and members of the military, and provide educational programs addressing protocol selection, tag placement based on package content and how to conduct effective site surveys.
McDonald reports that the fourth quarter of 2006 set new records for Alien in terms of tag and reader sales and RFID services, though the company declines to disclose specific sales figures. "Our forecast is that the next quarter will be even better," he predicts.
