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5th Forum of distributors of electronic components was held October 31 in Saint Petersburg

5th Forum of distributors of electronic components was held October 31 in Saint Petersburg.

The main topics of this year's Forum were opportunities and risks during the recession of the market.

The Forum was attended by more than 50 top-managers and owners of Russian distribution companies.

The first report was made by Aubrey Dunford. He presented an overview of the global and European distribution markets. So the participants received the basis for comparison of the Russian market features in the context of global trends.

The following report was dedicated to the analysis of the Russian market. Against the background of a long recession in Europe, figures of the Russian market did not look so bad, see Fig. 1.

The report was followed by hot discussions dedicated to the causes of the recession and forecasts for 2014. Most of the participants of the Forum are expecting a reduction in the Russian market in 2014. However, all participants agreed that the Russian market could grow rapidly for many years, if the government will eliminate customs and administrative barriers to the development of high-tech production in Russia . According to most of the Forum's attendees the number of new development projects in Russia is not reduced , the OEMs continues to invest in new products. It gives hope for the development and growth of the market in the future.

 

Boris Rudjak , CEO of Compel , the largest Russian distributor , made a report on the opportunities afforded for the business during a recession  . His key thesis - a recession is the best time for strategic planning and internal changes in the company: "The staff accept difficult changes easier when the market is not  growing and there is no illusion estimations of success activities" His second thesis - Russian distributors do not have to imitate foreign companies as a classic Western model has reached a deadlock , "We have to develop our own business models that will better fit the Russian market and the new time."

Alexander Kiselev, director of development "Promtekhkomplekt", a leading distributor of connectors, did the report on the possibilities of business diversification. His company investing in services to develop custom connectors, as well as in the development of its own production for the past 8 years . Although this activity generates only 20% of revenue, it allows to get away from price competition with classic distributors through offer unique combination of services. It ensure stability for the company during the recession.

Participants paid great interest for the report of Vasiliy Balandin, quality analyst, PO IRTYSH, OEM communications equipment . He presented the results of investigations of counterfeit components and supply chains. He determined the unreliable suppliers that create the greatest risks. He also presented a list of reliable suppliers by the statistics of the company. The surprise was the fact that the "unreliable" list consist of companies that have state certificates of quality management, as well as a trusted list includes distributors who do not have the state certificates.

 

One section of the forum was devoted to the management of risk of non-payment. This problem put strong impact to EMS-providers that depend on a small number of large customers. EMS-providers cannot meet their obligations to pay for the components in time because they can't get money from their customers - OEM- companies, as well as they can't get forecasts of payment. Lukachev Simon , director of EMS-provider PK Altonika proposed to solve these problems together with the distributors. He proposed a transparent pricing with the interests of the distributors, and guarantees long-term cooperation . On the part of distributors, suggestions were made to give them a full complete set of contract manufacturing orders , which would allow them to manage the risks . For a company Altonika it would mean a return from the EMS to CEM model with large losses in turnover and profits.

In conclusion, the Forum hosted a discussion of the web-site for recruiting staff for distributors of electronic components. The project has received the support of the Forum's attendees.

Sales growth of Russian distributors

 

1Q2012

2Q2012

3Q2012

4Q2012

1Q2013

2Q2013

3Q2013

In ñomparison with Q4 2010

102%

107%

117%

119%

100,5%

109%

112%

Y2Y Growth

4,1%

-0,9%

10,4%

17,8%

-1,5%

1,9%

-4,4%

Q2Q Growth

1,0%

4,9%

9,3%

1,7%

-15,6%

8,5%

2,6%

 

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