NEC, Packard Bell to merge operations

NEC, Packard Bell to merge operations

Despite repeated assurances to the contrary, NEC Australia's computing group announced today it would amalgamate its operations with Packard Bell NEC from next year.

This comes just days after an NEC spokesperson told ARN the two companies would remain completely independent.

Steven Robertson, marketing manager for NEC Australia, was adamant that NEC and Packard Bell would remain separate in Australia, claiming that "NEC is moving into the Internet and total solutions spaces. This will not involve Packard Bell." He said both companies are doing well and will continue to do so, though will maintain their distance.

However, NEC's local personal product group will amalgamate with the Australian Packard Bell NEC operations, but the Packard Bell brand will remain, officials said. They would not confirm the name of the new entity nor would they speculate on whether the amalgamation was a direct result of Packard Bell's US troubles.

Packard Bell NEC said last week it would withdraw its Packard Bell brand of PCs from the US market, lay off 80 per cent of its 2600 employees, and close its manufacturing plant in Sacramento, California. Local NEC officials were quick to distance themselves from that situation.

The new Australian company expects revenues to exceed $2 million in 2000.

Both parties were adamant the amalgamation would not result in any channel consolidation because each company operates in different markets.

Packard Bell-branded products will continue to address the retail sector, while NEC products will proceed in the corporate, government and education market, officials said.

Packard Bell will continue manufacturing at its plant in Penang in Malaysia as well as maintaining sales offices in Singapore, Hong Kong, China, the Philippines and Australia. The two-year-old Penang plant manufactures Packard Bell and NEC desktop and notebook computers for export to all countries in Asia-Pacific, as well as Australia and the Middle East.

NEC employs 1400 staff locally and reported a $650 million turnover for the financial year ending on March 31 this year. Packard Bell Australia employs 45 staff.

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