IPG ready to tone up under new stewardship

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HP's commercial category chief Amin Mortazavi has just replaced Amr Hassan as the general manager of the vendor's Imaging and Printing Group (IPG), pitching him into the hotseat at a challenging time for everybody in the printer channel. He reveals what Middle East partners can expect from his appointment.

You have taken over the reins from Amr Hassan, who had been the face of IPG for a long time. Can we expect IPG to be a dramatically different operation under your leadership?

No I don't believe so. At the end of the day we are implementing the worldwide strategy regardless of the names behind the positions. But what we need to do at the moment, and I am sure that anybody in this chair would do the same, is to have the best team in place for when we see the recovery taking place. It is all about having costs under control and the best team for the recovery phase.

When will that recovery begin?

It is really difficult to say, and nobody dares to project it. But we should see some light at the end of the tunnel towards the fall of 2009. I believe this part of the world will go through the recovery phase much quicker than the European countries, for example.

How satisfied are you with the sales channels that HP IPG has?

I think a natural correction started to happen in the market last year, which has been good for vendors and customers. Only the strong will survive and by that I don't just mean in terms of financial background, but also the level of professionalism. We have observed some traders disappearing from the market or ceasing to exist financially which can only benefit HP partners that are real IT professionals.

So would you expect the number of HP partners in the Middle East to decrease this year?

No, not necessarily because the number of Preferred Partners, as well as the distribution landscape, are both still there. Those who disappeared are traders who were not necessarily IT specialists.

HP has always been regarded as the printing market leader here due to the huge market share it has. How has that situation been affected by the change in market conditions since the beginning of the year?

We still have a very high market share in the Middle East and there are some countries, such as Saudi, where we have the highest market share in the globe. Of course when you are the market leader with 70% or 80% share you are the target of your competitors. That makes it very difficult for us, especially during difficult times, but we have been able to maintain our market share.

You took the decision to exit parts of the low-end inkjet business. What was the thinking behind that?

At the end of the day we are responsible for bringing in profitable business, not only for HP but also our partners. We took the decision not to play in the ultra low-end battle. Did we lose market share? Yes, in that part of the segment we did, but we wanted to because we didn't want to play there.

Over the past few months Middle East partners have raised concerns about the high level of inventory in the channel. How much of an issue is this for HP?

We have identified that and in Q4 - ending 31st October - we took measures and implemented strategies to help partners in the first and second tiers deplete stocks. I have to say that at this point of time none of our partners are really facing any high levels of stock. We have been able to manage that and bring it down to a healthy level again.

It seems that inventory management is a delicate issue for both vendors and partners...

Yes, because at the same time we need to be very cautious as we have certain lead times to get the products in this part of the world. We need to maintain a certain mix and level of inventory so as not to run the risk of losing business.

What can Middle East partners expect from IPG now that you have taken over the management role?

I would say that I will continue the transparency in terms of the strategic moves that we would like to take and the long-term planning that we do. One thing that partners can count on is our commitment to the channel and to our customers.

Earlier this year there was a lot of publicity about HP printers being sold in Iran through partners such as Redington. What steps have you put in place to prevent products being supplied to embargoed countries?

That project was closed by my predecessor Amr Hassan so I was not actively involved in this.

Can you make any comment about ensuring products don't go into embargoed markets in future?

All our three partners who used to do business [in Iran] were informed by our legal entity in Geneva about the situation and about the decision that was made by HP corporate in Palo Alto.

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