Outgoing Digiland managing director, Chin Nam Low, has refuted claims he is leaving the company after two years at the helm because of poor financial results at the distributor. However, Low did concede that "the HP/Compaq merger has been tough" on the Singapore-based company whose parent group is listed on the Singapore stock exchange.
"We underestimated the impact of the merger," Low said. "Our results have been affected [by the HP/Compaq merger] and the result has been below expectations. It is not only Australia that is suffering because of the merger, it is the whole group. In Australia, we have been affected by the merger in terms of falling margins, rebates and so on.
"[HP has] changed its terms and conditions for price protection and inventory holding and, of course, the volume rebates have been halved since the merger."
Low said that while the whole IT business and working for Digiland had been "very enjoyable" for him, the fact that he was new to it made it tough.
"I have been contemplating my resignation since last year," Low said. "It is time for me to pursue other interests. When I joined Digiland in Australia I was new to the IT industry and I just feel that it [IT] is something that doesn't interest me in the long term."
"It is a very interesting, enjoyable and challenging business. There are very high revenues but low margins. I am new to this business and have not developed a passion for it. I am just not used to running a company in this industry.
"I enjoyed greatly the challenge of running an IT company but I think I can make better use of my knowledge and expertise elsewhere. Nevertheless, I turned Digiland Australia around and it became profitable in the 2001 and 2002 financial years.
"The first half of financial year had been difficult because of the HP-Compaq merger. That is something beyond our control. I am confident that Digiland Australia will ride through this transition and re-emerge as one of the leading broad-based distributors in this country."
Low is an electrical engineer by trade and his background was in the telecommunications industry.
He said he was currently looking at several options but would "most probably" be running his own business that "will not be in the IT space".
Having taken out Australian citizenship, Low said he would stay in the country to concentrate on building a services company.
Consolidating its focus on key product areas was the challenge for Digiland going forward, Low said.
He was confident about the ongoing viability of the group and its Australian operation.
"The group has very strong relationships with major vendors and certainly Digiland will grow with the growth of the industry in Australia and the Asia-Pacific," Low said. "The big challenge is in managing the broad product portfolio that we have and to focus on profitable product lines.
"I can tell you that the white box area is the growth area for us and in the future a lot of focus is going to placed on that as well as the whole area of consumer electronics. Because of the relationships we have with the retail market, selling DVDs players and things like that are a realistic option for us."
Low gave two months notice to Digiland's Singapore-based corporate executive team and will finish up on April 30. He is actively assisting interim country manager, Khoo Teng Liat, in the transition and the search for a new MD.