Ingram Micro: Back To Growth

HIGHLIGHTS Implemented Six Sigma: secured 2 black belts and 8 green belts Secured, for the first time, 5% revenues from exports, mainly Vesta PCs to the SAARC region Good processes and quality benchmarks With a channel strength of 9,000 partners, it is one of the biggest in the country and on par with Tech Pacific Positioning of Vesta PCs and notebooks vis-à-vis competition Very late entrant in the server space which is characterized by cutthroat competition

When SP Rajguru took over as COO of Ingram Micro last year, the company was stuck with growth of just about 11%, including mobile phone revenue. A year later, Rajguru has every reason to rejoice as he has steered the company back to old-time growth rates, and driving this growth were host of initiatives the new COO put in place. First he phased out the Magix brand and reoriented the company's own branded PC portfolio, aligning it into two brands, Vesta and Vesta components. The Vesta brand consists of PCs, notebooks, servers, UPS, inverters, gaming kits, and business card scanners, while the Vesta components brand has products like motherboard, keyboard, and mouse. Setting its house in order paid off handsomely for the company as it registered a 100% increase in the sales of Vesta PCs, up from 10,000 units in FY 2002-03 to 20,000 units during fiscal 2003-04. The component business also grew by 50% with major demand coming from assemblers. SP Rajguru COO Indranil Chowdhary CFO

The company attributes the good growth during the fiscal to Project ZETA-Zero Error Tolerance Attitude, a structured method for identifying significant customer areas leading to higher sales. The Six Sigma initiatives further improved its deliverables. That apart, the company's exclusive alliance with Samsung on mobile phones garnered Rs 267 crore, signifying a growth of 60%. However, though mobile phone margins are higher, the exclusive tie-ups the distribution vendors have forged with handset manufacturers in a way restrict their growth in the long run.

Meanwhile in the networking space, Ingram was clearly the number one player. On the consumables front the company made Rs 80 crore from HP while the total business from HP came to Rs 410 crore. Other revenue drivers were Intel at Rs 205 crore, Cisco at Rs 140 crore, while Microsoft and IBM together made around Rs 235 crore. On the channel side, the company added close to 1,000 partners.

On the distribution front, Ingram upped its portfolio by inducting BenQ and Western Digital into its computer component segment, and Acer and Xerox into its systems and peripherals group, while its enterprise systems group added the Netscreen, Intransa, Secure Synergy, and Hitachi range of products. The peripheral distribution space is one to watch this ongoing year, with Ingram fast catching up with competitors. The company's growth outlook is 30—35%, and it plans to focus on emerging technologies, having already put in place a separate team to cater to emerging technology products like digital cameras.