Tokyo (July 11, 2007) -- The Konica Minolta Group opened an offshore development center in India today under a partnership agreement concluded with HCL Technologies Ltd. (HCLT), a leading Indian IT service provider.

The expansion of the network environment and diversification of applications have led to an increase in the number and kinds of software applications necessary for the development of multi function peripherals (MFPs) and printers, major products of Konica Minolta's core office equipment business. The increase is almost equal to that of cellular phones and digital home appliances, and it is likely to continue rising at an annual rate of about 50%. In the light of this, Konica Minolta has been exploring the commencement of offshore software development to ensure a stable supply of software development resources.
This is one of the important group-wide management issues of its medium-term business plan, “FORWARD 08.”

India is renowned worldwide for its ability to develop quality software products and HCLT, in particular, boasts a wealth of experience in developing software products for a number of major U.S. and European companies. Konica Minolta, highly valuing the technical excellence and management skills of HCLT, has been outsourcing HCLT to develop software for its medical systems over the past years, and a relationship of trust has been built between the two companies since then. Because of this, HCLT was Konica Minolta's top candidate for partnership as it explored the possibility of offshore software development. Under the partnership agreement, Konica Minolta's offshore development center has been built within HCLT site. In the beginning, the center is staffed with about 50 workers, but that number will be increased to 240 or so by the end of FY2008.

The offshore development center will work on the development of application software for MFPs and printers, development tools for customization, and software to be built in computed radiography—Konica Minolta's major medical product.

Meanwhile, Konica Minolta will focus most of its domestic development resources to the development of its core technologies, such as image processing technology, Konica Minolta's proprietary technology that cannot be outsourced, as well as basic product functions. In so doing, the company aims to enhance its core technologies and accelerate the development of new products that incorporate those technologies.

The expansion of the scope of software development requires increased man-hours for quality assessment of software products. To ensure a stable supply of resources for the quality assessment process, in May of this year, Konica Minolta established a wholly-owned software quality assessment company in Dalian, China, which will start operations by the end of July.

Through this new three-pillar structure -- development of core technologies in Japan, development of application software in India, and quality assessment in China, Konica Minolta will improve the quality and efficiency of software development and accelerate the development process, thereby further strengthening its business structure.

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