Malaysian technology solutions provider K-One Technology Berhad (K-One Tech or K-One Group) plans to establish a joint venture in Vietnam to conduct cloud computing business.

The firm said in a statement that its wholly-owned subsidiary G-AsiaPacific Sdn Bhd (GAP) had entered into a term sheet with Vietnet Distribution Joint Stock Company (Vietnet) for the joint venture.

The proposed joint venture shall operate through a joint venture company under the proposed name of G-AsiaPacific (Vietnam) Limited Liability Company.

The joint venture firm will be 51 percent owned by GAP while the balance of 49 percent will be owned by Vietnet.

The initial capital contribution of the joint venture company will be $300,000. GAP will make a cash contribution of $153,000 for its 51 percent shareholding, while Vietnet will make a cash contribution of $147,000 for its 49 percent shareholding.

The proposed joint venture is in line with the K-One Group’s ongoing cloud business expansion in ASEAN and Oceania.

According to the group, the cloud market in Vietnam is one of the fastest growing in ASEAN, driven by its accelerating digital transformation.

In addition, the multinational Cloud partners of GAP; namely Amazon Web Services (AWS), Google and Microsoft have big footprints in Vietnam for good reasons.

“In this regard, the KOne Group should ride with these cloud giants to take its share of the fast rising Vietnamese cloud market,” it said.

With each party holding meaningful and about equal stakes in the joint venture company, it said both parties would be equally incentivized to charter the growth of the joint venture company with each party leveraging on its respective expertise to the best of its ability.

According to K-One Group, Vietnet will focus in developing the business through their wide network while GAP will provide the technical support to secure the business.

Time to market is of the essence and the proposed joint venture route is an effective way to quickly seize business opportunities and market share in a high growth and rapidly advancing technology business such as the cloud, it said.

The firm also said the proposed joint venture will have immaterial impact on the net assets and gearing of K-One Tech for the financial year ending December 31, 2022 but is expected to contribute positively to the earnings of the K-One group for the financial year ending December 31, 2023.

The parties shall execute the definitive agreements – joint Venture and shareholders’ agreements on or before November 30, 2022.

K-One Tech or the K-One Group is anchored by two main businesses: electronic manufacturing services (EMs) which primarily focuses on healthcare/medical devices, consumer electronic gadgets, internet of thing (IoT) products and industrial equipment and cloud computing.

The EMS business is promoted under the K-One flagship while the cloud business is spearheaded by the GAP flagship. The current sales contribution ratio for EMS:cloud is approximately 60 percent: 40 percent.

GAP is principally involved in the business of advanced Cloud technology which encompasses infrastructure as a service (IAAS), platform as a service (PAAS), software development, information technology (IT) consultancy and other professional services such as cybersecurity in relation to cloud solutions.

GAP is a market leader and is one of the pioneers in cloud in Malaysia. It works closely with AWS, Google, Microsoft and Alibaba as its vital partners.

VietNet was established in 2011 in Ho Chi Minh City as a value-added distributor (VAD) of cybersecurity solutions.

Its offices are in Ho Chi Minh City and Hanoi in Vietnam, Cambodia, and Singapore.

Keeping abreast with an evolving IT cybersecurity landscape, Vietnet has established itself as the leader in the cybersecurity industry in Vietnam.

It partners with the leading cybersecurity vendors and value-add their offerings with pre- and post-sales services and professional cybersecurity advisory services to its resellers, partners and customers.

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