Ingram Micro’s watching brief

Ingram Micro came close to acquiring Aptec but has now put Middle East and Africa (MEA) expansion on the backburner. Major new EU accession states take top priority according to the global distribution giant’s regional president.

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By  Stuart Wilson Published  November 30, 2004

Ingram Micro came close to acquiring Aptec but has now put Middle East and Africa (MEA) expansion on the backburner. Major new EU accession states take top priority according to the global distribution giant’s regional president. Hans Koppen, president at Ingram Micro Europe, explains: “We made one attempt to strike a deal with Aptec but our board thought that the region involved more risk than they had an appetite for. It was basically concern over the potential for large receivables, the credit risk and the risk of E&O (errors and omissions) through poor inventory management in the Middle East. These factors can all damage financial results.” Ingram Micro is current evaluating several leading national distributors in Poland and the Czech Republic and assessing their suitability for acquisition. Once these moves have been completed, Ingram Micro will once again turn its attention to MEA, aware that the barriers to entry will grow the longer it leaves it before making a move. “I know we can create a solid business in the Middle East if we put in place the right boundaries and stay in the business areas where we can function properly,” says Koppen. “I may well make another attempt to move into the region but you can only do so many things at once and at present Eastern Europe comes first.” Ingram Micro is already expanding its export business into MEA including from France into North Africa. While this business continues to grow, the sales acceleration remains gradual and Koppen believes that it will hit a ceiling level at some point in the future. “In the long run we cannot ignore the MEA region,” says Koppen. “We have to start developing our abilities there but it is all a matter of timing and priorities. Vendors are talking about it and pushing us to expand for obvious reasons. First of all they want to offload the credit risk they have with weaker local partners. They have more pressure these days in terms of regulatory requirements for transparency and proper accounting, and want to minimise their risk in these particular areas.” With MEA occupying a strategic position between Europe and the Asia-Pacific theatre, Ingram Micro is also looking at how its recent acquisition of Tech Pacific will impact its ability to serve the region. “The Asian operation has had a dormant office in Dubai for a long time and we debated a few times whether to revitalise it,” says Koppen. “With the dominant position we now have in India and the operations in Pakistan it could come up again.”

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