An ebullient Graham McBeth (pictured), president of Avnet Abacus reckons the company is moving smoothly along its path to becoming pan-European with a strong local focus and establishing a profile as a design-led IP&E distributor.
Long hours meeting suppliers and customers look to have paid dividends. McBeth describes supplier retention as "more than 99 per cent", embellished by some notable successes in adding pan-European status to previously regional supplier agreements.
"Enersys, Varta, Tadiran, Samtec, Hirose and Harwin have all agreed pan-European deals," says McBeth. Avnet Abacus has also added Power integrations to the line card, a considerable coup as the power semiconductor company dropped existing distributors to make room for Avnet Abacus in its European network. As McBeth observes, "Their power conversion ICs fit perfectly with our power module lines."
The customer base being sold these products has also grown. Combining the customer counts at Avnet Time and Abacus, and allowing for overlap, McBeth estimates that the present 13,700-strong customer base represents a 30 per cent upside since Avnet acquired Abacus in January last year.
The explosive market growth in the past nine months has helped as McBeth willingly concedes. Market research company Bishop puts connector growth 40 per cent up on this time last year. Avnet Abacus's book to bill ratio is weml into the positive.
Longer term growth will be based on building the company's reputation for engineering expertise. In fact McBeth sees it as an imperative as he thinks the IP&E market will undergo fundamental change before the end of this year.
"In the semiconductor market suppliers deal direct with 100 customers at most," he remarks. "In IP&E it's many thousands and suppliers just don't have the resource to continue supporting such numbers."
Supplier reassignment is on the cards, and McBeth is positioning Avnet Abacus to take advantage. He has a 55-strong technical engineering team in the company covering all the products on the line card, and they will be in the vanguard working in cahoots with suppliers to transition customers into the distribution channel.
McBeth concedes this is a longer-term growth strategy. "We know it can take 6 to 12 months for design led business to come through," he says. "We've no ambition to grow business based on aggressive pricing."
He spies growth opportunity in the existing IP&E distribution TAM which is dominated by the 58 per cent share of small, local, niche distributors. Nurturing these attributes in Avnet Abacus while taking advantage of the purchasing power it can wield will increase market share.
IT and logistics have also bedded down according to McBeth. The company is now fully integrated on one IT system, and after some initial hiccoughs which required close contact to reassure customers, all is running smoothly. Avnet Abacus products are now being delivered from a central IP&E warehouse at Tongeren in Belgium, though the Abacus warehouse in the UK is also being retained.
"The UK is still a big market for us, and the costs of freighting the products in from Belgium are higher than delivering from a local warehouse," says McBeth.
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