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Avnet strengthening mainland investment

By Jiang Wei (China Daily)
Updated: 2009-05-29 10:51

Phil Gallagher

Avnet Technology Solutions, a US technology solutions distributor, will strengthen its investment in China even as the company's profit decreases in developed markets due to the financial crisis.

"Mature markets, like the US and Europe, are severely hit by the financial crisis. The recovery there will be slower," said Phil Gallagher, global president of the company. "But there are some positive signs of growth in the emerging regions, including China, and it is definitely a country we will continue to invest in," he said.

KP Tang, the company's Asia Pacific president, said Avnet would not ignore the more mature markets, but its emphasis would be on the emerging markets, including China, for growth.

Avnet Technology Solutions and Avnet Electronics Marketing are two subsidiaries of Avnet Inc. Avnet Electronic Marketing has operated in China since the 1990s while Avnet Technology Solutions launched its business in the country just last December.

Avnet Inc reported an 83 percent year-on-year drop in net income for its fiscal third quarter last year as a result of the recession, according to its earnings report released last month. Its profit fell from $107 million, or 71 cents a share, to $18 million, or 18 cents a share.

KP Tang

Avnet Technology Solutions, however, saw its revenue in China touch $20 million from January to March, the first quarter after it began operations here. Tang expected Avnet Technology's revenue in the country to touch $100 million this year. The technology solutions distributor now partners with IBM and Sun in China and expects to bring in more partners into the country. Its global partners include HP, AMD and Motorola.

Tang said the company also sought to make available Chinese products in overseas markets.

"We are not limited to US partners and suppliers, but also look at products made in China. In fact, there is one storage product that we are looking at," he said, refusing to elaborate.

He said, compared to local service distributors, the company had advantages in a number of areas, such as intellectual property, long-term relationships with major international suppliers as well as strong financing ability.