The 2012 Power List

After much research, interviews and analysis, Channel Middle East presents the Power List, ranking the biggest distributors in the region in 2012.

Tags: Aptec DistributionAsbis Middle East FZCOChannel Middle East Power ListJumbo IT DistributionMetra Computer GroupRedington GulfUnited Arab Emirates
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The 2012 Power List
By  Manda Banda Published  June 22, 2012

After much research, interviews and analysis, Channel Middle East presents the Power List, ranking the biggest distributors in the region in 2012.

There’s no denying that the Middle East IT distribution sector is slowly recovering from the global economic meltdown that shook the IT market three years ago. Demand for technology products is beginning to pick-up, particularly in the first quarter of 2012. Although the commercial sector is still waiting for Microsoft to release its much-anticipated Windows 8 OS, demand for mobile devices such as smartphones, tablets and Ultrabooks in the consumer electronics space is driving distributors to pay more attention to retail. Distributors are seeing opportunities to broaden their revenue streams in retail, commercial and enterprise sectors.

Yet despite the adversity that is still lingering in the distribution channel, there is one thing that is common. Many distributors have continued to look at ways of running a lean and profitable business operation. In fact, many have come out of the economic downturn of 2009 a little bit wiser.

Interestingly, distribution companies in the region are aware that it will take longer for the market to experience the sort of scale it enjoyed at its peak in mid 2008.

As is common place with this research, every distributor featured in this year’s Power List has been approached by the editorial staff of Channel Middle East magazine, to open their financial accounts and give us their audited revenue figures for the past financial year, in this instance for FY2011.

In the past years, the survey focused on companies to provide their projected revenues for the financial year just closed, and to verify that by providing the actual audited accounts of the previous years.

Like was the case last year, the Power List 2012 features final audited accounts which all the 15 Dubai-based distributors shared with us. In this manner, while we did compare with last year’s figures to make sure that there are no inconsistencies between reported 2010 revenues, we are able to present a timely, accurate and more up-to-date list with no reservations over the validity of the figures supplied because the figures given to us were verified with each one of the distributors featured this year.

Along with the vital sales revenues, this year’s Power List also includes a profile of each distributor, key data such as number of active accounts, key brands, regional presence and an overview on what milestones each company attained in the past financial year, and strategic plans for the rest of 2012. We have also asked distributors to highlight some of the pressing challenges they are facing in the regional distribution space.

As always, there are a few surprises and this year is no different, as some distributors have dropped revenues and fallen down the pecking order. However, the majority of the distributors we interviewed remained unsure about the market in the second quarter although many are optimistic that the outlook for the last two quarters of 2012 is promising because of the anticipated Windows 8 launch and Intel’s push with its Ultrabook platform. In general, distributors expressed optimism about the second half of 2012 because the Holy Month of Ramadan will this year, coincide with the slow summer months, so many expect business to pick-up in the last five months before year end.

Indeed, the 15 distributors featured over the coming pages collectively made sales of $6.066 billion last year, an increase of 12.6% on the previous year. That is a remarkable achievement given the challenges facing the market, but when you compare it with 24% growth during the 2007-2008 period, it is clear how deeply the market has been affected in the region.

So why have some distributors seen sales decrease, while others posted apparently strong growth when the trend generally has been for distributors to expand at roughly the same rate? Well, there are numerous reasons why this is happening.

Some distributors were more heavily exposed to runaways in the Dubai channel, while others were impacted by flooding in Thailand which led to hard disk drive manufacturers closing their factories in the last four months of 2011. This seriously impacted the components supply chain. Other distributors were affected by the political upheaval that engulfed some countries such as Egypt, Syria, Tunisia and Libya.

That aside, there are a handful of distributors featured this year that actually managed to grow their business on an organic basis because they secured new vendor partnerships. Many went in search of greenfield markets particularly in sub-Saharan Africa.

We’ would like to reiterate that revenue is just one indicator of performance and certainly doesn’t suggest that a distributor with a higher sales revenue figure than another is ‘better’ in any way. After all, the Power List generally excludes many prominent value focused distributors because the very nature of their business means they simply don’t do the volumes needed to warrant a place on the list.

However, what revenue does give us is a snapshot of market demand and an indication of the size and scale of the IT distributors involved in the majority of transactions that take place in the Middle East regional channel.

All those that made the Power List this year, did more than $100m in revenue in FY2011, so any possible participants need to make this threshold at least.

We believe that it is imperative that all data published in these pages is verified to the best of our ability. We hope the measures outlined above will contribute towards building a more accurate and transparent picture of the distribution sector in the Middle East, as well as creating a level playing field for each distributor included in the list.

Editor’s note: We believe the Power List 2012 contains the 15 largest Dubai-based IT distributors operating in the market based on the data available to us at the time of research. However, we also acknowledge that there may be other IT distributors in the region which would qualify for inclusion so if you feel there are any glaring omissions then please let us know and we will consider those companies in future.

The 2012 Power List                        
DistributorChange20112010AuditorStaffActive Accounts            
Redington Gulf             same$2.024bn$1.49bnDeloitte & Touche1,2009,500
Metra Computer Group             same$702m$748mErnst & Young1,000750
Jumbo IT Distribution             Up$443m$352mGrant Thornton100700
Aptec Holdings LTD             Up$431m$385mErnst & Young6303,800
FDC International FZE             Down$420m$405mPuthran Chartered Acc.180680
Logicom Dubai LLC             Up$335m$305mKPMG1502,500
Almasa IT Distribution LLC             Down$318m$337mDeloitte & Touche1501,000
Emitac Distribution LLC same$278m$256mKPMG140945
Asbis Middle East FZCO Up$215m$209mErnst & Young831,300
Mindware FZ LCC Up$202.7m$183mDeloitte & Touche1383,500
Despec MERA LTD Down$161m$163mKPMG100330
Trigon LLC Up$160m$144mMohammed Al Ayouty & Co C.A95325
Westcon ME Group Up$143m$126mDeloitte & Touche120500
Golden Systems Middle East Up$128m$121mErnst & Young1001,000
Empa Middle East Down$106m$130mErnst & Young72850

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