Saudi distribution titan to open Dubai arm

Saudi Arabia's largest IT distribution house BDL is planning to launch an operation in Dubai.

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By  Andrew Seymour Published  July 19, 2007

Saudi Arabia's largest IT distribution house BDL is planning to launch an operation in Dubai. The move is being backed by a number of vendors who have promised the company distribution franchises, according to its general manager.

BDL intends to use the operation - set to consist of an office in Dubai and a separate facility in the Jebel Ali Free Zone - to directly address markets in the GCC, with the exception of Saudi Arabia which will continue to be managed from the company's headquarters in Riyadh.

Channel Middle East can confirm that BDL is currently exploring local registration procedures with a view to begin trading as soon as possible. An official launch of the Dubai subsidiary, which will be called BDL Gulf, is scheduled to take place in September, while the company expects to be fully operational as early as mid-October.

BDL has carved out a strong reputation in the Saudi distribution market and reeled in sales of more than US$130m last year to cement its status as the Kingdom's largest technology wholesaler. It represents a number of leading brands including AMD, Lexmark, Fujitsu Siemens, Creative and Samsung.

Tamer Ismail, boss of BDL (pictured), says contracts covering the UAE and Gulf markets have been penned with at least three unnamed manufacturers so far and talks are continuing with other brands interested in tying up with the company. "We have started to sign contracts with mobility and components vendors, while more agreements are being finalised and will be signed soon," he revealed.

Printer vendor Lexmark, which works with BDL in Egypt and Saudi, admits it is buoyed by news of BDL's arrival in Dubai and keen to extend its alliance with the company. "It expands our possibilities and our business so we support their expansion in the region," said Middle East general manager Francois Feuillet.

Fujitsu Siemens, which inked a Saudi agreement with BDL earlier this year, is another vendor interested in deepening its relationship with the company. The PC and notebook manufacturer is aware of the distributor's Dubai aspirations and intends to meet with BDL management later this quarter, according to Sascha Haake, director SME and channel at Fujitsu Siemens Middle East. "As I already stated in the press conference in Saudi [announcing the KSA contract], we are investigating other territories with BDL as well. But no final decision has been made yet," he told Channel Middle East.

Meanwhile, digital entertainment vendor Creative says it hasn't had any discussions to extend BDL's distribution contract beyond Saudi, but Middle East sales manager Jordan Lee welcome its plans. "In terms of communications with the vendors and finding new business opportunities, I think it will work very well for BDL if they are here in Dubai."

BDL has rose to the top of the charts in Saudi courtesy of a model based on supporting more than 2,700 resellers in the Kingdom's main cities and establishing a highly competitive A-brand hardware portfolio. It believes it can replicate that success elsewhere in the Gulf.

"We are coming to the Dubai market with the aim of becoming one of the top three distributors within two years," declared Ismail, who says the company is aspiring to reach sales of more than US$120m during the first year of operation. "We are hoping to be a high-class regional distributor and our unique vision that differentiates us from current regional distributors supports that position. We are already present locally in the major markets of the region and will not dump shipments from our office in Dubai. We are present in these markets to achieve real market development as we stress the importance of a local presence to reach further selling points."

A senior management figure at one Dubai-based distributor believes there is enough room in the UAE and surrounding Gulf markets for BDL to prosper, but predicted the company would have its work cut out. "They are very big in the Kingdom because they are from there, but being a regional distributor is something different as each country has its own culture," said the source.

BDL insists it will reinforce the extent of its ambitions by shortly appointing a recognised channel figure to run the operation. The individual in question is understood to have signed a contract with the company and will come on board before the end of the summer. "The Dubai set-up will run separately and have its own general manager who is an expert and a well-known person in the Dubai market, in addition to educated and experienced employees who have worked for a period of time in distribution," said Ismail.

Details of BDL's plans to expand its Middle East business come just a year after it embarked on its first non-Saudi venture by opening a subsidiary in Egypt. The company also launched an office in Bahrain two months ago, which will fall under the umbrella of the Gulf division once it is operational.

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