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Thursday, July 14, 2005

We’re third largest IT distributor in Nigeria – Shankar

Director, Redington Gulf FZE, United Arab Emirate, Dubai, and covering Africa Mr. Raj Shankar, was in Lagos to mark one year of Redington’s partnership with Hewlett Packard (HP) Nigeria, recently. He spoke to newsmen on the firm’s plans for Nigeria. REMMY NWEKE was there. Excerpts:

Tell us about Redington?

We have operations in over 25 countries, in the India sub-continent, Asia Pacific, Middle East and now Africa.

The company in terms of establishment in India is about 1000 years young, the establishment in the middle east is about seven years young, in Singapore, its about two decades ago and in Africa its about just getting one.

This is broadly about Redington, and for your consumption, Redington has consolidated turn-over in excess over $1 billion.

This includes India, Asia Pacific, Middle East and Africa. One point I might just have to tell you at this stage is that Redington is a global company which is the third largest IT distributor in the country - Nigeria.

Redington also a company, third largest IT distributor in the world today, which is listed in the New York Stock Exchange and Taiwan Stock Exchange, they have taken 36 per cent stake in Redington, thereby Redington is now poised from being a regional player across Asia Pacific, India sub-continent, Middle East and Africa. We’re now set for the global stage. I hope I have gladly given you a flavour of what Redington is all about.

What’s the name of this company that took a stake in Redington?

This third IT distributor in the world is called SYNNEX. The reason why I mentioned it is because there is capital infusion into the company that has made the financial standing of Redington of a very high order.

Now, let me quickly come down to some specifics. The entire region of Africa is managed by my colleague, Mr. Sumant Saran. He is the Vice President for the entire African operation. He comes with a very rich experience in the IT business and has worked with companies of good repute like Jambo Electronics in the middle east with over 28 retail outlets and he used to be the General Manager heading the IT division. He joined Redington a little over two and half years ago and has since assumed total responsibility for the African operation.

He is also going to work with Mr. Vikas Virama, the country manager for the Nigeria operation. Vikas, again comes from a very rich experience in IT distribution. He used to work with a company, Techpacific. Techpacific was until recently the number one IT distributor in India, Redington was the number two. He has come on board, for almost one year. He manages and takes responsibilities for the entire Nigeria operation.

Can you elaborate on your relationship or partnership with HP?

HP, a lot of us know is one of the leading IT companies. We have signed up with them which is of the reason to celebrate the one year of that partnership.

How rewarding has the partnership been in the past one year?

Well, very rewarding as you must have known, HP is one of the leading brands in Africa and definitely this relationship has been very rewarding and we have been able to do some businesses, most of which was with HP. That has really shown that Redington adds value to HP and it has been good for us.

Your company has been here for over a year now, can you tell us what your views were before you venture into the country and now?

The operation is about two-year old. So our HP relationship is for about a year now. Africa as a whole in my opinion is a land of opportunities and that is the reason we came into Africa and today, if you look at the European market, the market is growing. Two years before this, middle east had brought in at least 20 per cent, so the budget is coming down as the market matures.

Africa in our scheme of things is a market with a very great market potentials, hence we decided to come to Africa and look at Africa very seriously by investing and setting up local offices in East and Central Africa. This office here in Nigeria caters for our West African operations.

Yes, I can tell you there are challenges and a lot needed to be addressed, but yet, I can tell you that in two years, we have found our foot and we’re just about to get the benefit of what we have done in two years.

And in terms of our expansion plans, don’t forget, we’re distribution organization., for as we talk, we have other brands in our portfolio other than HP. It would be our endeavour to get as many brands as possible, into four-main segments of what we would like to call Personal Computers (PCs), printers and image products, PC components and other products.

There seem to be a steady increase in the number of channels for hardware, printers and PCs and even now the GSM handsets, but there is no corresponding service centres, is Redington planning to open one in the country?

Thank for asking that question. If there was one key differentiating factor between Redington as a distributor and any other IT distributor, is the fact that we provide support services for the products we distribute. This is unlike the world number one and number two IT distributors, they are not into services business.

What makes Redington unique is the fact that we would be providing services. And to answer your question, yes, Redington has received from HP, the authorization to be their service provider in Nigeria for the entire range of products. We already have some service engineers on board.

Can you give detail on the authorization given to Redington by HP in terms of your partnership?

If that question is very specific to services, let me tell you, there is HP partners called ASDP, it stands for Authorised Service Delivery Partner. This is a status that is given to companies that have the capability in the terms of doing repair level, which is of a very high order. When we talk about support services, it encompasses two areas; one is what we call services during the warranty period and those services which include sale of spare parts.
HP has a system that offers extended warranty programme and we would be offering that to our customers in Nigeria.

What is the level of your investment in the country currently?

In terms of investment, I told you that Redington is a distribution organisation for HP. For any distributor, that is, a very significant portfolio and for any distributor that is, in terms of revenue, because HP is not a mere IT company, but a conglomerate. You have right from PCs down to servers, printers, scanners and a whole lot of HP services.

So, obviously this would be very important of anybody’s portfolio. Having said that, we have plans as distributor to invest and we normally would invest in two areas. Investment in terms of capital would go into essentially stocking, stepping up infrastructure, like to rent houses and service centres and so on.

And the second area for investment for us is people investment. As we talk today, we have over 10 people with completely brand new sale offices which is now set up, a brand new service centres which is in the offing and a brand new warehouse which has been established. So these are our two forms of investment.
Beyond HP, what other products …

(Cuts in) It’s Redington endeavour to look at four categories , although it is very difficult to talk about brand specific. So number one is that we have HP, ACER. The number two is that as we talk, we have imaging and printing; we have HP and at the moment that is all we have for Nigeria. But for others we also have Canon, Epson and other brands.

The third phase, I mentioned to you earlier, was the PC components, there are Intel PC unit (PCU), whether it is harddisk drive from Seagate, Western Digital or some motherboard from Intel, Gigabyte and even Microsoft operating system for that, all of which are not yet here, but there is another focus area.

Beyond the field of IT as one major, shall we say segment, we’re also looking at another segment which is telecommunications, not as a service provider but a distributor at this point in time for handsets for one of the largest mobile company in the world.
This is something the contract is being sealed and the heat is getting dry.

What’s the connection between Afprint and Redington, their log looks the same and Redington Nigeria is located at the Afprint premises in Lagos from what your card is reading?

Interestingly, Redington, is a part of what is known as Kewalram Chanrai group, which has historic presence of over one and half century. You may not even find a single held company today in the business, whether is in Asia Pacific or Middle East and Africa, which is becoming a household name. Today, you talk about Afprint, it is a household name I am sure in Nigeria.

Now you have Aplot, it is also of the same group, but that was till December 2004. That is when a company called Synnex stepped in and invested 36 per cent in Redington. Thereby today, its not one shareholder but two shareholders and that was why I did not talk too much about Kewalram Chanrai group.

Founded in 1993, Redington is a leading provider of IT products, Logistics Management and serves more than 6700 IT resellers in India covering over 450 cities.

What is your market share in Nigeria as of today and what do you look up to?

In Redington, it is one of our philosophies that in any market we engage in, we’re either the number one, or a very good number two.

The reason why I said that is that in any region where Redington is today, that’s one of the edge that we enjoy.

Yes, Redington would aspire to be the No 1 in the geography on the product group or a very good No 2. Also remember that I mentioned to you, that for HP in Nigeria, we are the No 3, within one year. So, we’re just warming up.

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