NZ assembly market set for shake-up

NZ assembly market set for shake-up

With one leading PC assembler already in the hands of receivers, several high-profile Kiwi assemblers have been scared away from selling goods only on price so as not to meet the same fate.

PC General ceased trading two weeks ago, with managing director David Sinclair citing "difficult trading conditions" which made it "imprudent for the company to continue trading".

"Before making this decision the board considered all viable options to enhance the company's performance or sell the business as a going concern," Sinclair said.

It is still unclear whether the receiver would allow the company to continue to trade.

In his message to suppliers, Sinclair said the company's solicitors would inform the com-pany's debenture holder of the board of directors' decision, and "the receiver may or may not" allow the company to continue to trade.

No surprise

IDC analyst Graham Penn says the PC General receivership wasn't a surprise, although he hadn't predicted when it would happen.

"Over the past few months it had been trying to move as much product as possible, presumably just to generate cash. The trouble is, that becomes a downward spiral."

Penn said that without naming names, other local assemblers will be under pressure. "Some will just go gracefully and close the doors and quietly fade away."

Penn did admit that there are many viable assemblers, but he believes the days are numbered for those selling only on price.

He added that the squeeze on assemblers isn't just confined to the Shaky Isles as end-user demand for PCs increases.

"There are too many players in all parts of the market. But we haven't had a spectacular failure for a little while.

"We've had PC Power in Auckland get into a certain amount of difficulty, but PC General has a higher profile, and it's been in business longer," he said.

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