REDINGTON INDIA: Gearing Up

With Ingram gobbling up Tech Pacific, the distribution business in India has

become bipolar with battle lines drawn between Ingram and Redington. Redington,

it seems, has enough ammo to challenge Ingram. A look at the year gone by

demonstrates the company's strengths in the distribution business. Overall it

was a good fiscal for Chennai-based Redington India, which showed a 43% growth,

up from 16% last year.

Growth came from different product lines cutting across systems and

peripherals, which constituted 63% of its total revenues. New product lines also

saw good traction-such as Zenith PCs, Acer consumer desktops and portables,

and BenQ notebooks. Products added include the HP Indigo hig-end print products,

Xerox printers and copiers, and Philips monitors.

HIGHLIGHTS Good growth in systems and peripherals $24 mn investment from Synnex Mobile handset business drops 61% Embarked on infrastructure augmentation Ability to manage both MNC and Indian products with ease Unable to sustain its mobile business   Needs to up its ante on networking products   Now faces much larger, aggressive (post-merger) Ingram Micro l CEO: Jitendra Kulkarni l Start-up Year: 1993 l Product & Services: Distributor of PCs, servers, peripherals, consumables, mobile handsets, networking equipment and tech support l Branches: 33 l Dealers: 7679 l Address: SPL Guindy House, 95, Mount Road, Chennai-600032 l Tel: 52243535 l Fax: 22352790 l Website: www.redingtonindia.com Jitendra

Last year saw an organizational restructuring. Redington India has now become

the holding company with two entities-Redington Middle East and Singapore-under

it. This change was driven by an investment of $24 mn by Synnex (a $10 bn

company, the third largest global distributor of IT products). Synnex is based

out of Taiwan and has presence in Australia, Hong Kong, and China. Investing in

Redington, Synnex manages to gain foothold into the Middle East and Indian

markets. Moreover, the investments will enable Synnex to leverage its products

like PCs and other IT products manufactured by Asustek Computer, its strategic

partner, through Redington. Meanwhile, using Synnex's capabilities Redington

will beef up its logistics management.

The dampener however was the mobile business. Redington managed only Rs 84

crore out of the Motorola mobiles, as against Rs 220 crore in FY 2003-04. The

reason, the company says, is because the market is polarized towards Nokia.

Meanwhile on the components side, Redington made Rs 337 crore from Intel CPUs

and Rs 65 crore from Intel motherboards.

The year also saw Redington adding 1,131 dealer outlets and four branch

offices. It also made major investments on improving its infrastructure like

warehouses and service centers. With the economy doing well, with consolidations

within the industry, and with several new distribution opportunities opening up,

the company sees a healthy business growth for the ongoing fiscal.