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Tue 1 May 2007 02:46 PM

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Vendors raise Saudi stakes

Race to grab a piece of the US$3 billion-a-year Saudi market sees leading vendors announce a slew of distribution agreements to increase coverage in the Kingdom.

The strategic importance of in-country distribution in the Saudi market has again been emphasised following a slew of new agreements initiated by vendors determined to improve their coverage in the Kingdom.

Several top brands used the recent Gitex exhibition in Riyadh to outline the formation of new partnerships that they believe will strengthen their visibility in the Saudi channel.

HP and AMD both made additions to their line-ups while Fujitsu Siemens beefed up its Saudi distribution channel by signing Nahil Computers. FSC reckons the appointment of Nahil - coming just a few months after FSC formally announced a distribution arrangement with Saudi distributor BDL - will increase its penetration of the lucrative SMB-focused reseller channel.

"A key component of our overall strategy has been the expansion of our partner network in Saudi Arabia," explained Samer Sayed, sales manager for FSC in Saudi Arabia (left).

"Nahil Computers' long-standing relationship with its customers, extensive SMB portfolio, and local presence for more than two decades made it the obvious choice for boosting our reach within the Kingdom's SMB segment."

Nahil will offer FSC servers, tablet PCs, thin clients, workstations and storage solutions, according to general manager Suleiman Al Khudhair. "Our new role as distributor for the entire product portfolio of FSC creates an opportunity to demonstrate our capabilities and business acumen in the Kingdom," he said.

Meanwhile, Dubai-based distributor Almasa is starting to see the fruits of having a dedicated office in Saudi following the launch of a local subsidiary earlier this year. HP has endorsed its presence by giving Almasa in-country rights for its entire IPG portfolio starting from May 1st.

"In HP we are focusing on the importance of local presence in the Kingdom instead of a regional distributor as this provides the markets with better business support," explained Khalid Hijazee, SPO country manager at HP Saudi Arabia.

Abdul Rahman Safadi, regional director at Almasa, insists vendors are more willing to engage with the company in Saudi now that it boasts a local presence.

"We understand that vendors require an on-the-ground presence and that's why we moved ahead with putting a local infrastructure in place," he explained. "We are finding all our vendors are coming to support us and there are even new vendors trying to establish relationships with us following our Saudi expansion."

Safadi added: "It is becoming more difficult to do business [in Saudi] from Jebel Ali because the channel is maturing into segments and the support requirements are changing. Proper distribution is getting as close to the reseller as possible and giving them product availability, customised credit and marketing support."

Elsewhere, Samsung is understood to be searching for a local KSA distributor to carry its ODD, display and printer lines while BDL is now working as an AMD distributor in Saudi even though it is currently required to purchase from Asbis in Jebel Ali.

Meanwhile, 43,000-strong Indian IT services provider HCL has announced its arrival in Saudi Arabia through a strategic partnership with Riyadh-based electronics manufacturer Advanced Electronics Company (AEC).

The move builds on AEC's plan to expand into the higher-margin IT services market. "This agreement represents a milestone in AEC's diversification strategy," said Dr. Ghassan Al Shibl, CEO at AEC. "Our association with HCL highlights AEC's growing capabilities as an IT provider in the region, which compliments AEC's existing strong capabilities in the areas of telecoms."

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