Redington ready for further expansion in 2006

Zoher Mukadam, formerly category head commercial PC and server business at Redington has now joined Lenovo. Channel Middle East caught up with Mukadam prior to his departure to find out the plans for 2006

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By  Stuart Wilson Published  January 29, 2006

|~|redingtonsukhil200.jpg|~|Zoher Mukadam, former category head commercial PC and server business at Redington|~|Zoher Mukadam, formerly category head commercial PC and server business at Redington has now joined Lenovo. Channel Middle East caught up with Mukadam prior to his departure to find out the plans for 2006

CME: How committed is Redington to expanding both its portfolio and its Middle East presence?

ZOHER MUKADAM: Traditionally, we have focused on the retail space but now we are taking on products for SMB and corporate resellers. We have started with HP PSG commercial desktops and servers as well. We signed up with Microsoft in Saudi and also have the go ahead for Bahrain, Qatar and Kuwait in addition to the rights we already hold in Oman and Yemen.

CME: Any other vendors lined up to come on board the Redington bus?

ZM: Well we also signed up 3Com recently for Saudi and we have got the rights for Lenovo in the Kingdom as well. We expect big things from Lenovo as they really look to build out the channel in the wake of their acquisition of IBM’s PC division.

CME: Is further geographical expansion on the cards?

ZM: Within the wider Redington group, we consider India, Middle East and Africa as separate entities. There are plans to expand into Turkey and also the CIS and this could happen in the first half of 2006. We are already very strong in the Levant and have put people on the ground in Jordan and Lebanon. Plus we also have an office up and running in Egypt. As we move into new territories we try to expand the rights that we have with existing vendors to cover these markets as well.

CME: Are the plans to expand the product portfolio part of a more fundamental business shift?

ZM: There are two areas where we are really looking to expand the product portfolio: components and value-added products. We have Intel rights in Africa and we’re looking at HDD and ODD vendors as well. In the value space we want to add security software, storage products and also add to our current networking portfolio.

CME: Is your sales methodology changing to reflect these plans?

ZM: We have separated the sales team into three parts. We have a team for corporate resellers like Alpha Data and Jeraisy, a team for SMB-focused resellers and also a team working with power retailers.

CME: How well has Redington fared in terms of growing its operations in Saudi Arabia?

ZM: Three years ago we were doing US$10m a year in Saudi with a team of five people. For the year ending March 2006 we expect the team of 25 to bring in revenues of approximately US$80m. Redington has a stocking point in Riyadh and there are plans to open up facilities in Jeddah and Khobar as well. Redington is really into moving in-country and we are also building up operations in Qatar as well. Vendors appreciate this effort because it takes us closer to the resellers and means that we can offer and manage channel credit much better than those working remotely.

CME: Redington works as an LSP for HP’s Saudi assembly facility. How’s that progressing?

ZM: I personally manage that and it is doing very well. We are providing shipments for CDPs out of both Riyadh and Jebel Ali. From Riyadh we serve the CDPs in Egypt and the Levant such as Raya, Metra and Hyperdist and from Jebel Ali we sell to CDPs such as Aptec, Tech Data and Emitac. We’re selling about 12,000 PCs a month from HP’s assembly facility, which is producing a total of about 20,000 units each month.

CME: Was it a wise move for HP to set up the facility in Riyadh?

ZM: The main reasons behind it were the PCs for homes initiative and a three-year deal with the Ministry of Education. Plus, it is important to understand that Saudi Arabia, with a population of 24 million people is a massive market in the regional context. It makes sense to put a facility there and if the rules for setting up a business were relaxed even more vendors would follow suit. Saudi is the only country that has direct road links to all the major markets in the region and you can easily ship product from Jeddah to Egypt or Sudan.

CME: Can Redington continue its impressive rate of sales growth in Saudi Arabia moving forward?

ZM: Imagine what would happen to our operation in Saudi Arabia if we went into even more cities and built up our channel breadth even further. Elsewhere in the region, we will also look at building up more stocking facilities and points of presence. As soon as a market hits a critical mass — sales potential of US$25m to US$30m a year — the next step for us is to put in a warehouse. We are contemplating doing this in Kuwait too.
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