By Staff writer
Dubai-based IT and telecommunications distributor Redington is growing at a rapid rate. The firm recorded sales of US$445 million for the year ending March 2006 and is on target to meet its 40% sales growth projection for the financial year ending March 2007 giving it annual sales in the region of approximately US$630 million.
Redington offloaded an 11.32% stake in the company to private equity fund Chrys Capital for US$15m in March this year.
The transaction, which values Redington’s overall operation at close to US$130m, has set a benchmark valuation ahead of Redington’s proposed initial public offering (IPO) in India. Redington is expected to use some of the funds from the IPO to construct automated distribution centres in the Middle East and India.
Broadliner Redington continues to build up an impressive network of in-country points of presence across the Middle East and Africa. Long-term, the Commonwealth of Independent States (CIS) is also on the radar for Redington as it continues to extend its geographic reach within the region.
Beyond IT, the company is also keen to expand into the consumer electronics distribution space. Redington already has distribution agreements with companies including security solutions vendors SonicWall and McAfee, mobile phone giant Nokia, and storage media vendor Imation.
2006 was a busy year for Aptec in other respects: the distributor introduced a new business unit management structure in May and then moved into new premises at Dubai Internet City (DIC) in October.
Also in May, Aptec Mobiles teamed up with mobile phone distribution giant Brightstar to create a new joint venture called Brightec. The two companies expect the new venture to become one of the largest mobile telephony and wireless distributors in MEA.
Aptec’s performance was also solid in 2005 with the firm witnessing phenomenal rises in Lebanon and Turkey during the course of the year. Aptec recorded sales of US$320 for 2005 with sales in the UAE climbing approximately 20% year-on-year.
A key priority for Aptec is striking a balance between its broadline distribution activities and its value-added operations.
Aptec operates in the Middle East, Africa and Turkey. Its clients include US Robotics, Sun Micosystems, 3Com, Acer, APC, CA, D-Link, Fujitsu Siemens, HP, Hynix, IBM, Microsoft, McAfee, and Symantec.
The main change for the distribution giant this year was a new CEO, Frank Sheu, formerly with Australian distribution firm Synnex, who took over the reins in January.
Sheu outlined his strategic priorities as boosting reseller breadth across the region, increasing the vendor portfolio, developing the firm’s product portfolio and enhancing the levels of value to resellers. The new boss has already made good on his promise to bring more vendors into the regional distribution giant’s portfolio, signing agreements with firms including D-Link, Proview and ASRock over the year.
Dedicated to the reseller channel, Almasa Distribution delivers expert logistics to fulfil the differing requirements of the market and demands for quick product turnaround.
The firm, which was selected as distributor of the year for 2005 in the Middle East and Africa region by ATI Technologies, witnessed healthy revenue growth in 2005, with sales of US$410 million up from US$332 million.
Almasa’s vendor portfolio includes Acer, Asus, Galaxy, US Robotics, BenQ, HP, Maxtor, Acer, PNY, Hitachi, TUL, WD, Foxconn and Samsung.
New clients gained during the year include memory vendor Kingston Technology and thin-client vendor Wyse Technology.
Other clients in Mindware’s portfolio include Intel , Novell, IBM, Adic, and Veritas.
Mindware, which operates in the Middle East and North Africa, has more than 4,500 reseller partners across the region as well as a logistics centre located at Dubai Airport Cargo Village.
Chammas’s efforts to rejuvenate the company appear to be paying off: in 2005, the firm recorded sales of US$180 million in 2005 compared to US$140 million in 2004, and the firm is targeting further revenue growth of 20% for this year.
Then in August, the firm’s managing director Adnan Al Falah also decided to leave.
Tech Data also lost a number of distribution agreements in 2006 with storage and security software giant Symantec opting not to renew its Middle East distribution deal with the distributor, and its contract with networking vendor 3Com also coming to an end.
The company’s sales were also slightly lower than anticipated, at US$360 million in 2005, below the US$400 million target the firm had previously set.
On a brighter note, Tech Data remains keen on in-country expansion into Saudi Arabia and is still discussing the possibility of setting up Tech Data as a legal entity in other major markets in the region such as Saudi Arabia. It is also looking to Azlan, the value-added distribution arm in the Middle East that it set up in 2005, to contribute significantly to the development of future business.
The distributor spent much of the year chasing more than US$6.1 million in outstanding payments from three Dubai-based resellers in fallout from the Dubai credit crisis.
But the firm still came out fighting — it posted healthy financial figures for the six months ending June 2006, with first half sales climbing 55% to US$172.9million and after tax profits soaring 85% year-on-year to US$4.72million. In 2005, it recorded full year sales of US$150million.
Logicom’s activities include the distribution of technology products and the provision of integrated IT, networking, telecom and business software solutions. The distributor aims to position itself as the distributor of choice for resellers and prides itself on its ability to provide genuine value-add.
Logicom began operations in the UAE in 2001, setting up Logicom Dubai FZE. It now serves not only the GCC, but also Saudi Arabia, Pakistan and North African markets and employs 60 people at its Dubai office.
Logicom has a new facility in Jebel Ali and is planning to set up a warehouse in Saudi Arabia.
Logicom’s vendor partners include Intel, Microsoft, and HP.
Suhail Issa resigned in March, then came former 3Com employee Wael Fakharamy, who left after just four months for “personal reasons”, before Balall Yaqub was named CEO in July.
The appointment of Yaqub saw the return of a man who started Emitac back in 1976 and a renewed focus for the firm. Upon his appointment, Yaqub said that he wanted to take Emitac to the “next level” and make it one of the leading IT companies in the region, not just the UAE.
With that goal in sight, Emitac is in the process of establishing a major joint venture with a large in-country distributor in Saudi Arabia.
Emitac, which is targeting sales in excess of US$300million for full year 2006 in comparison to US$203 million in 2005, offers a wide range of services to resellers in various Middle East markets including the UAE, Qatar, Jordan and Kuwait.
Its clients include Netgear, Citibank, Panasonic, DHL, Lucent Technologies, Wyeth Pharmaceuticals, Etisalat, Sharjah Municipality, Mashreq Bank, Commercial Bank of Dubai, and Alghurair Group.
The company offers a sophisticated online ordering system for resellers, which allows it to keep excellent control of its own overheads.
Part of the wider Asbis Group, which has massive strength in Eastern Europe, Asbis is looking to boost its Middle East and North Africa sales to approximately US$84million during full year 2006.
The is in comparison to 2005 when the company registered regional sales of US$72million.
Asbis Group is one of the largest suppliers of computer components in Europe, Middle East and Africa.
Headquartered in Cyprus, the privately-owned company has operations in 27 countries worldwide and serves more than 12,500 customers around the world via four distribution centres and 33 local warehouses. The supplier recorded sales of US$970 million in 2005.
Asbis distributes products in the region for a range of companies including Hitachi Global Storage Technologies, IBM, Intel, Lite-On, NEC, Samsung Semiconductor, Seagate, Toshiba and Prestigio, Supermicro and Foxconn.
A key deal for Asbis this year was with IT product vendor Prestigio, which selected the firm to extend the range of Prestigio monitors it carries in the Middle East and Africa.
The distribution outfit, which claims to be the fastest growing IT component distribution network in the world, reported full year Middle East and Africa (MEA) sales of US$143m in 2005 — up 46% on the previous year’s figure. It is targeting sales of US$180m in MEA in 2006.
The firm suffered a major setback, however, when it was dropped just this month from a distribution agreement by hard drive giant Seagate over a clash over its audit records.
Incorporated in Singapore in 2000, eSys is a global hard drive distribution giant, with 117 fully owned operations in 38 countries, including a regional office in Dubai.
For 13 years Online has given many of its vendor partners access to the region’s leading systems integrators — responsible for big local networking installations, including projects for Dubai Silicon Oasis, Saffir Marina Hotel, the Lebanese American University and the University of Bahrain.
The distributor has direct presence in the UAE and Saudi Arabia and also operates through an extensive partner network that covers more than 15 countries in the Pan Middle East region.
With over 50 employees, Online offers extensive regional support, which includes the provision of logistics, network design, and technical assistance, sales consultancy and marketing programmes to both its vendors and channel partners.
Based in the Jebel Ali Free Trade Zone of Dubai, Online Distribution is a subsidiary of Datatec, an international networking and IT services group which has operations in Europe, North America, South America, Africa, Middle East and the Asia Pacific region.