A savage 50 per cent slump in the South Australian Government's expenditure on PCs this year has forced one of the State's largest computer resellers into voluntary administration.
However, Lodin Computer, a 10-year veteran of the South Australian IT industry which employs more than 50 people, is confident it will survive its financial troubles.
Last week, Lodin entered voluntary administration, after playing a key role in the local computer economy since the mid-1990s.
As well as a supplier of clone desktops and Toshiba notebooks under the State Government's PC panel contract, Lodin is a member of a three-company Adelaide consortium that is contracted to supply computers to the State's schools through the DECStech 2001 program.
Lodin director Roger Godwin said he was confident the company would survive the problems.
"The level of support we've received from the State Government, our creditors and EDS has been incredible," he said.
"We are in a good position because we went early to protect the company, its staff, its customers and its creditors."
The administrator for Lodin, Hugh McPharlin from Edwards Marshall & Co, said a final decision on Lodin's future would be made within three weeks. Lodin was established in 1987 by Roger Godwin and his brother Lawrence who was in an associated office furniture supply business. After selling a range of Tier One personal computers, including NEC and Toshiba, for several years, the company began manufacturing its own clones for sale to agencies within the State Government.
In 1995, Lodin was chosen as part of a small panel to supply PCs to the State Government in a contract worth more than $40 million a year. Other suppliers on the contract are Protech Australasia, Microbits, IBM, Toshiba and NEC.
However, according to a consolidated quarterly report produced by Supply SA on the panel contract, State public sector PC purchases for April to June this year were just over $6 million, down from more than $12 million last year.
Although Godwin declined to discuss specific figures, he said Lodin's share of the State Government spend on PCs was holding.
"The overall State Government spend is 48 per cent down on the corresponding period last year," he said. "It has been pretty savage. The consequence of a smaller market has been lower margins. The fall-off in sales this year has put a strain on our move to services."