REDINGTON INDIA: Growing to face new challenges

Redington India registered a 32% growth in turnover over the last year to
become the number one distributor in the country. Considering the base and size,
Redington's growth is no mean task and worth mentioning, as the company seems
to be gearing up to face the competition from the new Ingram Micro-which
acquired and merged Tech Pacific recently to become the largest IT distributor
in the country.

Redington sent out a clear message with its performance last year that in the
coming days, the distribution business in India will be a clear battle only
between the two top players. This Chennai-based company posted a strong growth
in 2004-05, thanks to its new initiatives in value business started in the
previous fiscal, which paid rich dividends. The company grew only by 16% in
2003-04.

Growth came from almost all product lines in the last year, except mobile,
cutting across different business divisions. The new products lines also helped
for growth and the company did considerably well with Zenith PCs, Acer consumer
desktops and laptops and BenQ notebooks, among others. It also added new
products like HP Indigo high-end printers, Xerox print and copier solutions and
Philips monitors.

The company did well in the systems and peripherals, showing good growth,
while demonstrating its ability to manage both MNC and Indian products with
ease. However, it needs to increase its focus on networking products, where
there is more scope for the player.

Redington meanwhile lost its mobile revenues (Motorola distributor), from Rs
220 crore in FY 2003-04 to just Rs 84 crore in 2004-05. This came as a dampener
in the company's overall revenue and performance. It attributes this loss in
mobile business due to shift in buyers' trend towards Nokia.

Another major development at Redington over the last year was Synnex's
investment in the company. Synnex, the Taiwan-based company with a global
revenue of $10 billion, had invested $24 million in Redington. The infuse of new
funds helped Redington strengthen its operations in the country, besides beefing
up its logistics management through Synnex relationship.

Meanwhile, Synnex-the third largest global distributor of IT products with
significant presence in Australia, Hong Kong and China, was able to gain
foothold in the Middle East and Indian markets, with Redington relationship.
Synnex is also trying to push its own products-such as PCs and IT peripherals,
through Redington.

The disty also restructured its business through this investment, by becoming
the holding company for Redington Middle East and Singapore.

Redington increased its workforce by 100 and added close to 1,150 dealers and
four branches.