Ingram Micro looks to Asia-Pacific for growth

Ingram Micro looks to Asia-Pacific for growth

Ingram Micro executives are touting the Asia-Pacific as the next big growth area for the company in its progression across the globe. The claims of regional ascendancy come as rival distributor, Tech Pacific, prepares to open up the company to the wiles of the Australian stock market and potential acquisition offers.

Currently, the Asia-Pacific region represents 10 per cent of Ingram's total annual revenue worldwide.

In an interview with ARN during a visit to Australia last week, Asia-Pacific vice-president, Alain Monie, said there was definite room for more regional growth.

"We expect it [Asia-Pacific] to grow faster than our other regions," he said.

Currently, the region has one of the highest growth rates across its worldwide operations, he said.

Monie's visit to Australia coincides with recent speculation over the fate of Ingram's main Asia-Pacific distribution rival, Tech Pacific.

The distributor, majority owned by venture capitalist CVC Asia Pacific and Dutch-based Hagemeyer, has revealed it's in float discussions with investors to institute an Initial Public Offering (IPO) on the Australian stock exchange by the end of the year.

Speaking to ARN earlier this month, Tech Pacific chief, Shailendra Gupta, insisted Tech Pacific was not up for sale. However, the company did expect to receive offers once the listing was financed, he said.

Adding fuel to the fire, Monie, accompanied by US-based Ingram Micro executive chairman and chief executive, Kent Foster, arrived in Australia just days after Gupta flew in from Singapore to discuss the company's options with local financial investors. When asked if Ingram would consider acquiring regional distributors in the Asia-Pacific market to further boost its marketshare locally, Monie said the company was on no specific acquisition path.

"That is how we entered the market five years ago," he said.

Ingram prided itself on its global reach and expertise, Monie said.

At a grassroots level, the company was, however, focused on tailoring its distribution business to each regional market.

"In each geographic market, we aim for local staff and management," he said.

"We need to act locally."

Monie identified expansion into India and China as key to fuelling company growth, and said Australia was also a key market.

Speaking on behalf of the local branch, Ingram Micro Australia managing director, Steve Rust, said the most successful way for the business to cultivate its sales growth would be to increase its product offerings.

"We have taken onboard more vendors in Australia, but there are also more vendors we'd like to have," he said.

Rust said key technology areas which Ingram had also begun to place emphasis on were consumer electronics, security and networking.

Rust claimed the local business has grown three times the size of the overall market in the past year. A strong area of sales growth was Web-based orders.

"Our Web sales have grown 300 per cent in the last year," he said. "We are finding that the Web is appealing to a new side of our customer base: very small resellers, who are using our online tools to purchase goods."

In addition, the Australian subsidiary was looking to improve its order efficiency, Rust said, and was now in the process of implementing a new tool across its local operations to increase order fill rates.

The customised tool, developed by Ingram's European subsidiary, was expected to be rolled out across the region once initial trials were completed in Australia.

"This tool will allow us to take out the cost of holding more inventory, but also meet same day fill levels," Rust said.

Monie said Ingram was also looking to bring point of sale and scanning hardware into its Asian divisions as another avenue for growth.

"This is a new market for us," he said.

"In the US we have experienced strong growth in the health care industry with these technologies.

But, locally, the retail market is also strong and we would look to selling into that."

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