The recently listed Rectron Holdings Limited, a leading South African distributor of computer components, announced today that it will be establishing a distribution business in Australia. It is intended that the Australian company, to be known as Rectron Electronics (Pty) Limited, will be operational in Melbourne by June 1999.
Mark Lu, Chief Executive of Rectron Holdings, said the group`s globalisation initiative was prompted by its international suppliers, who believed the South African company`s impressive track record locally justified broader expansion. Rectron was founded in May 1995 and has shown solid growth by doubling after tax profits annually. The company was listed on the Johannesburg Stock Exchange in November 1998 and its interim results at December 1998 reported a 92% increase in headline earnings.
`We have done our homework properly and feel confident that this off-shore expansion will succeed. The venture has been thoroughly researched over the past three months in conjunction with consultants based in Australia, and we have put together a strong team to run with the project`, said Mark Lu.
The Australian operation will be modelled on the successful South African operational structure. Rectron imports its computer components and peripherals from the Far East, USA and Europe and distributes them through a client base comprising a national network of 3 500 dealers. Mark Lu said a key feature of the venture will be Rectron`s strong and well-established relationship with its international component manufacturers, who have pledged their full support.
International brands for which Rectron has procured distribution rights include the full range of Epson products as well as US Robotics modems, Gigabyte motherboards, Cyberdrive CD-ROMS, Microtek scanners, Viewsonic Monitors, Acer Peripheral keyboards, Genius input devices and Fujitsu hard disk drives.
Stephen Easton, who will head up the team as Managing Director of Rectron Electronics in Australia, was previously Executive Director of Mustek`s International Division in Midrand. (Mustek, through its subsidiary Tradeselect, is a major shareholder in Rectron Holdings.) `We are aiming to generate turnover of 20 million US dollars in the first year of operations in Australia and, all things being equal, will hope to double this figure in the second year`, said Stephen Easton.
According to Rectron`s research findings, more than 1,7 million personal computers were shipped to Australia in 1998 and, in terms of installation base, Australia is only second to Japan - the average Australian household has at least two personal computers.
`The Australian IT market is roughly three times the size of the South African market, so growth prospects are significant. Also bear in mind that the Australian IT market is relatively mature, which favours our distribution initiatives because most consumers handle their own installations`, said Easton.
Rectron Electronics will establish its logistical centre in Melbourne, and expects to open branches in Sydney in December 1999, in Brisbane in December 2000 and in Perth by mid-2001.
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