Sheu sets out Almasa goals

Frank Sheu, the recently appointed CEO at Almasa IT Distribution, has outlined his strategic priorities for 2006. Boosting reseller breadth, increasing the vendor portfolio and enhancing the levels of value delivered to resellers top Sheu’s agenda as he attempts to use his wealth of distribution experience to take Almasa to the next level.

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By  Stuart Wilson Published  March 7, 2006

Frank Sheu, the recently appointed CEO at Almasa IT Distribution, has outlined his strategic priorities for 2006. Boosting reseller breadth, increasing the vendor portfolio and enhancing the levels of value delivered to resellers top Sheu’s agenda as he attempts to use his wealth of distribution experience to take Almasa to the next level. Sheu, formerly managing director of distribution giant Synnex’s Australian operation, was named as Almasa IT Distribution’s new CEO in January 2006. “One of the top priorities is to consolidate the various functions within the company and ensure that we continue to enhance customer value,” explained Sheu. “This will involve some business process reengineering. Almasa is not a small player and we cannot go to market on price alone — that is not sustainable. We need to enhance our value proposition to both customers and vendors. That is the way to retain existing customers and also attract new customers.” Sheu also plans to bring some of the business models that he employed Down Under to the Middle East. The concept of ‘hassle free business’ is not something that the Middle East reseller community is currently too familiar with but Sheu plans to make it a reality during 2006. “As we look to increase reseller breadth, the priority is to make ourselves more attractive to small and medium resellers,” he explained. “We talked about hassle free business at Synnex in Australia. This meant making the company easy to do business with — be it on the phone or over the web. This was supported by good credit terms, regular interaction with the resellers and a responsive supply chain.” Rather than adopting a ‘one model fits all’ approach to reseller relationships, Sheu also plans to develop unique channel engagement models that fit with the needs of specific reseller types. “A retail superstore needs a different model to a commercial VAR.,” said Sheu. “In the past I split customers into six types; in this region it will probably be eight and we will have a different support structure and trading terms for each group. I’m not going to tell you the eight categories because I don’t want other distributors to know.” In addition to wooing the Middle East reseller community with superior service levels, Almasa will also look to cultivate relationships with more vendors during 2006. Sheu hopes that his extensive industry contacts will pave the way for further additions to the distributor’s product portfolio. “I think that the strong working relationship I have with many vendors will be a real value that I can bring to Almasa,” he continued. “Many of the tier two vendors — especially those from the Far East — are not yet active in this region. These could be the major OEMs manufacturing for A-brand vendors. They are used to big OEM deals of a million units for customers so coming into a market with their own brand and working with much smaller quantities requires a different business model. I believe that Almasa has the potential to be a strong distribution partner for some of these vendors.” Almasa IT Distribution’s sales surged past the US$400m mark during full year 2005. For Mehdi Amjad, group managing director at Almasa Holdings, the results were ‘satisfactory’. “We finished 2005 with sales of approximately US$410m for Almasa IT Distribution,” said Amjad. “This was below our expectations. However, it still represented growth of close to 30%, which is satisfactory. During 2005 we improved many of the business fundamentals and laid down some solid foundations for sustained growth. The increase in revenue during 2005 came mainly from the Middle East and North Africa as opposed to sales into Europe.” With rival distributor Redington gearing up for an IPO in India later this year, it now appears to be a case of ‘when’ rather than ‘if’ a Middle East distributor announces plans to list on the Dubai stock exchange. Amjad played down suggestions that Almasa would be the first regional player to float but admitted that it was still part of his long-term thinking. “It is going to be some time before we consider an IPO for Almasa IT Distribution; we still have a lot to do,” he explained. “The plan is there to eventually IPO — it is always a potential destination for any successful company.” “All the positive developments that we have talked about in the past have now been implemented to a degree — the regional coverage, the cost effectiveness, the downstream distribution as well as the product range and mix. All of this needs to be fully in place to create the right value proposition for the market,” Amjad concluded.

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