AMD sets challenge for Egyptian distributors

Plans to transition one to ‘master’ distribution status, which would result in a direct purchasing relationship and credit limit with the CPU vendor

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By  Andrew Seymour Published  September 24, 2008

AMD has laid down the gauntlet to its trio of sub-distributors in Egypt by revealing that it eventually wants to transition at least one of them to ‘master’ distribution status, which would result in a direct purchasing relationship and credit limit with the CPU vendor.

AMD recently added EMAK to an in-country line-up that also includes Gamma and Quest. While they are listed as official distributors and enjoy a closer relationship with AMD, they are all obliged to source stock from AMD’s Dubai-based master distributors Avnet and Asbis.

However, Abdallah Saqqa, regional distribution and sales manager at AMD Middle East and Africa, admits there is an opportunity for the trio to climb further up the ladder.

“I truly doubt we will appoint a fourth [sub-distributor] because we believe that what we have now is enough for the next two or three years at least. Nevertheless I might upgrade one of them to master distributor within a year’s time if the market conditions permit,” he revealed.

Saqqa, who is currently running AMD’s regional operation in the absence of a permanent managing director, warns that it will only promote its existing Egyptian distributors if they prove they are capable of making the grade. He confesses that none of them are yet ready to be exposed directly to AMD on the financial side, but says it is feasible for AMD’s team to work on growing their credit limit with its master distributors to a point where the vendor can eventually take over.

“If you ask me what my preferred situation is in Egypt then it is appointing a master distributor,” said Saqqa. “However, to date, none of the companies are really ready for this step and it would be unfair for them and for us if we were to do it now. We have three solid candidates and they are really educating themselves on the AMD business model, products and roadmaps. I can foresee a situation where one of them could be ready in a year’s time, but there is no guarantee because it really takes a lot of work from both ends before coming up with the decision to appoint a master.”

Although the Egyptian PC sector is worth fewer than 400,000 units a year, it remains one of the fastest growing markets in the region with a high number of local assemblers. Saqqa declined to say how much market share AMD has in the country.

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