Tech Pacific may stop Intel distribution in India

By : |July 31, 2002 0

NEW DELHI: Tech Pacific (India)
Ltd., the Mumbai-based Rs 1,675 crore distribution company, is on the verge of
discontinuing with Intel business in India. Although legally the distribution
arrangement is still valid, but for all practical purposes, Tech Pac is not very
active in promoting the Intel business as of now. When contacted, K Jaishankar,
CEO, Tech Pacific India, confirmed that in all probability the agreement will be
off shortly. “We have expressed our desire to Intel to discontinue our
distribution arrangement.” However, Intel officials refused to make any
comment on this issue.

According to Jaishankar, the main reason for discontinuation is the fact that in the current scenario, it is very difficult to make any money on the distribution of Intel CPUs. Coupled with this is the fact that as far as Intel is concerned, Tech Pacific is a very small contributor to their kitty in India–accounting for less than five percent of Intel’s business.

Elaborated Jaishankar, “We are a very small player as far as Intel business is concerned. We don’t like that.” At the same time, he pointed out that there is still a very slim chance that the distribution arrangement may yet survive. “Right now, we are in a very intensive discussion with Intel as to how we can make the business more attractive. Depending upon the outcome of the discussion, we will either discontinue or reorganize the whole business.” The final decision is expected to be taken within the next one week.

Meanwhile, Tech Pacific is also in talks with AMD to take up the distribution of its CPUs. Confirmed Jaishankar, “AMD has approached us and we are talking to them. They have given us a very attractive proposal and we are actively considering it.” However, he declined to elaborate on the proposal.

According to sources, AMD will not appoint Tech Pacific India as the distributor. Rather, it will appoint Tech Pacific Singapore as the distributor, which in turn will appoint Tech Pacific India as a sub-distributor. When contacted, Sanjeev Keskar, Country Manager (India), AMD, refused to make any comment on this issue. Currently, Intel has five distributors in India–Ingram Micro, Nebula, Redington, SES Technologies and Tech Pacific. These five contribute as much as 60 percent of Intel’s business in India. According to Dataquest estimates, Intel clocked in revenues amounting to Rs 1,193 crore in fiscal 2001-02. Out of this, around Rs 1,100 crore came from CPUs only.

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