TECH PACIFIC: Merged & Acquired

Midway through the year it was announced that Tech Pacific India, the largest

IT distributor in India, would merge with Ingram Micro India, following the

acquisition of Australia-based Tech Pacific by US-based Ingram Micro Inc. But

the merger came into effect only after March 31, 2005.

Tech Pacific continued on its growth path at nearly 27%, to close the year at

Rs 2,741 crore. The growth drivers were the systems business and the

value-driven enterprise business. The systems business grew 38% to net Rs 1,014

crore. Of this, Rs 795 crore came in from Intel-based systems comprising

desktops, notebooks, and servers. Unix-based systems and enterprise storage

products from HP and IBM constituted the rest.

HIGHLIGHTS India's top distributor merges into #3 Ingram to create a giant Good growth in systems business from Intel and component business from AMD Convergence products, geographic penetration, reseller finance schemes, enterprise products Enjoyed very good equity with leading vendors like HP, IBM, Sun, Samsung, AMD, among others Staid, lacks aggression and panache Exit of channel-savvy Ingram head SP Rajguru l Start-up Year: 1986 l Products & Services: Distributers for HP, IBM, Acer, Epson, Canon, APC, Iomega, 3Com, Cisco, Samsung, Microsoft, Adobe, Macromedia, Symantec, Palm, Sun, Oracle, Autodesk, and Avaya l Address: Gate 1A, Godrej Industries Premises, Off Eastern Express Highway, Vikhroli(E), Mumbai-400079 l Tel: 55960101 l Fax: 55960102 l Website: www.techpaconline.com

The systems market, specifically the PC market, ramped up quite a bit.

Interestingly, this was not achieved through MNC brands but from self and local

brands. Tech Pac deepened its penetration into the hinterland markets and gained

customers for PCs from HCL, and power systems from APC. Nearly 250 towns were

already being served; the market opportunity that was pursued was from areas

beyond these.

The 'value' division, dealing in enterprise products like servers, enterprise

software, and storage was the other sweet-spot for the year. Considering that

only 20% of the Unix market is channel-addressable, its contribution was good.

The company created distinct organizations to handle the security and storage

business to respond to increased demand from these categories. With these units

in place, the company invested in developing skill-sets, partner enablement and

partner training.

Tech Pacific had tried its hand at distribution of mobile handsets but it

proved to be a non-starter. It had to be content with brands like Siemens and

Panasonic, but Siemens exited the handsets business, and Panasonic volumes were

too low. The next target is to ramp up distribution of convergence products like

digicams and iPODs. During the year, the company developed new channels for

these products and reported reasonable volumes for HP digicams, Apple iPODs, and

Palm PDAs.

Many more initiatives were planned for the year but after September the

company had to put brakes on them. Next year, the company would get reported

under Ingram Micro.