Components distributor, Protac, has denied rumours it is exiting the market while dramatically realigning its business.
A source close to the distributor claimed it had been reducing staff numbers in its sales and warranties divisions since before Christmas, citing minimal profits as the cause. The source went as far as suggesting the distributor had no staff left.
Protac managing director, Gary Jeng, categorically denied the claims it was exiting the market, saying the distributor was instead realigning its market strategy.
“We’re doing things very differently going forward, but we are not exiting the market – we still have our warehouse in Silverwater [Sydney], we just don’t want to be fighting with the other distributors for the small orders,” Jeng said.
“We’re going to be dealing only in bulk from now on. We’ll still be selling chassis and memory and the like, but only in large numbers.”
Jeng confirmed Protac has closed its Victorian office, claiming it was focused on the small sales and thus no longer aligned with the new strategy. He also acknowledged there had been a significant reduction in headcount.
“Since we don’t do wholesale we didn’t need a staff of 70,” he said. “We’re around 10 now. We’re still doing warranties and business as usual, but there just wasn’t enough profit in fulfilling small orders for us.”
In mid-2008 the distributor appeared to be expanding operations with the signing of Taiwanese-based Biostar as a second motherboard vendor.
The news of Protac’s troubles comes on the back of reports at the end of March that receivers have been called in to embattled WA-based Apple reseller chain, Digilife.