SMB Computers in major reorganisation

Dubai-based IT distribution company, SMB Computers, has gone in for a major reorganisation of its business lines, which is expected to be completed within the next six to eight months.

The changes will also involve the company expanding its presence in the consultancy and corporate markets, where double digit margins are the norm. It's an approach designed to generate additional revenue streams, said an official.

Moves are also being made to add new lines to add to IT distribution.

With changes coming into effect, the company expects distribution to make up 50 per cent of its business in another two years from the current 70 per cent.

Sales to the corporate market - which SMB Computers ventured into only in early 2001 - would account for about 40 per cent by that time, with services making up the rest. Software development has just been started on a small scale, but could be spun off into a separate division if it comes to scale, said a top official.

"The company has grown rapidly over the past few years, well above the average rate of growth of 25 per cent for the PC industry. Now we have to manage our growth more effectively and be more focused and get a higher return on our investment," said Colin Summers, group general manager.

In the recent past, SMB Computers has picked up contracts with Emirates Group and Dubai Municipality for the Fujitsu-Siemens line.

It has just opened an Abu Dhabi office to pursue major IT contracts from corporates or government departments in the emirate.

Also, it is setting up a 10,000 sq.ft. service centre near Rashidiya to enter the still untapped third-party independent maintenance segment. Under this, SMB will honour warranties on behalf of vendors, who otherwise would have to use their own resources and facilities to meet any repair or service requirements.

The centre will be ready by year end. Also, SMB will double capacity at its logistics facility in Jebel Ali Free Zone. Summers confirmed that the changes being effected are not about cost cutting and there will be no layoffs.

A six-month JD Edwards programme is being implemented, which will translate into better efficiency across the group's operations. Investments on the various projects run into the millions of dollars, said Summers.

Of late, SMB's IT distribution side has been helped by higher offtake from the CIS, which is seeing a lot of activity on the PC side. The Dubai company is a HP distributor for these markets, excluding Russia. While the present logistics needs for the CIS are met through the Jebel Ali base, it might consider setting a warehouse facility in one of those markets at a later date, said Summers.

SMB has started a new sales and service centre in Cairo, which offers opportunities now that the Egyptian market seems to have stabilised after the currency problems earlier in the year.