In response to a press release issued by Epson South Africa yesterday, Guy Whitcroft, MD of Tarsus Technologies, the distribution arm of MB Technologies Limited has issued the following statement:
We are constantly reviewing our product lines to ensure that we are offering the best available products, while ensuring that these products are profitable for our customers and ourselves.
Some months ago it became apparent that Epson`s market shares were not growing as they anticipated with the appointment of a third distributor, and that the demand previously experienced for the products was being supplanted by other brands - namely OKI in the dot matrix market, and HP in the non-impact market.
This is backed up by data from BMI-T reports which shows that Epson`s share of South African dot matrix printer revenue declined from 46.3% in 1997 to 23.1% in the first half of this year (being overtaken by OKI, from OKI Technologies, another MB Technologies company).
Furthermore, the sales of Epson inkjet printers declined in real terms - from over 21000 units in the first half of last year to around 18000 units in the first half of this year -and this in a market that is expected to grow by nearly 20% this year. Epson has less than 1% of the laser printer revenues, so does not really feature in this market segment.
We therefore initiated discussions with Epson at that time to see whether the issues could be successfully addressed in order to return the line to profitable growth. In spite of various efforts and discussions this has not happened, and with the introduction of the Hewlett-PackardDeskJet 610c a few months ago, the situation worsened.
At a meeting earlier this week it was jointly agreed that we would disengage, with a target date for completion of 31 December being set.
HP is clearly the dominant brand in the non-impact market and we believe that by focusing on this we will be able to provide our customers with even better levels of service, support and profitability, while simultaneously providing our shareholders with better returns.
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