Sugon Sets Sights Overseas With $200 Million Headquarters Plan

Sugon, a Chinese information technology (IT) products and services provider, whose partners include several major Western peers, said it will invest 1.4 billion yuan ($206 million) on a new center focused on its global expansion from the coastal city Qingdao.

Sugon is one of a handful of Chinese IT companies to form new joint ventures with major Western firms over the last three years, following the rollout of a new national security law that has forced big multinationals to work through such entities when selling to government agencies and big state-run companies. Taking advantage of that fact, Sugon has formed ventures with U.S. tech giants including VMWare and Seagate, while others like IBM and Cisco have formed similar partnerships with different local companies such as Inspur.

Sugon, whose Shanghai-listed unit also goes by the name of Dawning Information Industry Co. Ltd., said its investment in Qingdao is part of a plan to pursue the international market, according to a stock exchange filing made late on Friday. It said the new center will house a number of departments aimed at the global market, including product development and sales.

“In order to accelerate our globalization strategy and development of core technologies and products … the company on July 20 signed an agreement with the Laoshan district of Qingdao for the development of … a Sugon global research and development headquarters base,” Sugon said in the statement.

The company, which is based in Beijing, added that it was preparing to set up a fully-owned subsidiary in the port city in eastern China’s Shandong province to execute the new initiative. It added the center will become the main hub for its planned global expansion over the next five to 10 years, and that the initial phase of investment will involve about 500 million yuan.

Shares of Sugon’s Shanghai-listed unit have rallied more than 5% over the last week as word of the global push began to circulate. But the stock is still down about 50% over the last 52 weeks.

Contact reporter Yang Ge (geyang@caixin.com)