Tech Data bails out of Middle East
US IT distributor pulls plug on $300m Dubai operation citing unsustainable trading conditions.
US technology distributor Tech Data has confirmed its withdrawal from the Middle East.
In a statement issued to Channel Middle East, the company - which is being acquired by rival distributor Aptec - said that changes in market conditions had made it "increasingly difficult" to operate profitably in the regional market.
Rival Aptec is expected to announce tomorrow that a newly formed and wholly-owned named entity called Track Distribution ME (TDME) will assume responsibility for a number of the distribution agreements formerly held by Tech Data.
Staff at Tech Data Middle East were earlier told that their jobs would be safe, but this has not been confirmed by Aptec.
Tech Data claims its decision to withdraw from the region follows an "extensive" period of review, during which an in-depth assessment was made of the long-term potential for the Middle East operation to contribute to Tech Data's profitability and long-term goals.
"In the past, we have enjoyed considerable success in the Middle East but changes to market conditions have made it increasingly difficult for Tech Data to operate profitably in the region," said Hanspeter Eiselt, managing director at Tech Data Middle East.
"The decision to exit this market has been made in the best long-term interests of the company and its shareholders. We'd like to thank the many customers that we've had the pleasure of doing business with in the Middle East over the years for their support," he added.
Aptec's TDME business will operate from the current Tech Data office location in Dubai and will retain existing telephone numbers to ensure business continuity, according to Tech Data.
Aptec and Tech Data also plan to form a strategic alliance that will allow TDME to leverage the US-based broadliner's central supply organisation in Europe.
"It is with much regret that we are announcing our withdrawal from the Middle East," added Eiselt. "The fact that we have been able to hand certain aspects of our business to Aptec's new entity will provide continuity for our former vendor partners and customers, and indeed for many of our employees. We wish them all every success in their new venture."