Bankruptcy rattles BenQ Mobile

BenQ Mobile is nervously looking towards the leadership in Taiwan as the company’s bankruptcy motion in Germany sends shockwaves throughout the global operation.

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By  Ronan Shields Published  October 2, 2006

BenQ Mobile is nervously looking towards the leadership in Taiwan as the company’s bankruptcy motion in Germany sends shockwaves throughout the global operation. BenQ Mobile's German-based European division filed for bankruptcy protection after its parent company withdrew its funding admitting that continued losses forced the “very painful decision.” With 3, 000 jobs in doubt in the European sector, BenQ Mobile's VP, sales and mobile marketing (mobile business) MEA, Najib Ashraf Kazi, conceded that these were uneasy times for the handset manufacturer but empahsised its determination to carry on. “At this point in time the main effect for people and products has been felt in Germany,” he added. “We do intend to continue the business under the BenQ-Siemens brand name.” Kazi declined to comment on the implications this would have on their business strategy in the Middle East but stressed the need for stability in order to turn the company’s fortunes around. “First of all we need to have some stability. The last year has caused a lot of ripples. For this to come we need some more clarity from Taiwan, that should be coming in the next couple of weeks, so at the moment I’m not in a position to comment.” The move comes only four months after the BenQ-Siemens brand was officially launched in the Middle East, promising to return the handset division to profitability by the end of 2006, however a faltering start to the venture has seen the company shelve its lofty ambitions. “We have moved our target of turnaround from the end of this year to the middle of June next year,” said Kazi, who went on to emphasise the faith that the company's distributors have shown in them. “This is not the first time this has happened in the industry. Our distributors have seen this thing before and been quite professional and patient. There is no panic at this time. This is a global situation and they are also waiting and watching.” BenQ Mobile has also been hit by political developments in the region as the recent war in the Lebanon forced it to shelve plans for negotiating a new deal with a Beirut-based distributor. When quizzed about the scenario Kazi commented: “We had been seeking a partner in Lebanon after the conclusion of the crisis but given the current instability we are proceeding with caution. We have shortlisted a partner but we can’t disclose who it is right now.”

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