Digiland to restructure

Digiland interim MD Khoo Teng Liat will remodel the distributor over the next three to six months to lift the company's performance. He said the resignations had nothing to do with the group's $4.375 million loss in the half year to 31 December. “We will restructure a bit. Australia is still an important part of our business. We are not seeking to exit Australia, but we are also looking at a few things,” he said. Khoo said no retrenchments were slated “at the moment.”

Digiland would also consider re-locating its Melbourne headquarters within Australia and “look closely” at lowering business costs and increasing efficiencies across the company's three business units, white-box, commercial and consumer. “No decisions have been taken as yet,” he said.

Digiland came under scrutiny last year when Epson revoked its Genuine Gold Seal distributor status when a subsidiary was discovered sourcing printer cartridges in Malaysia. The vendor designation requires distributors to source product locally. “Our relationship with Epson is getting better. We are working closely with them to show them we are good partners and can continue to enhance channel coverage for them,” Khoo said.

In the meantime, Digiland has also lost the agency to distribute networking products from HP's Procurve division.

Khoo said that HP only needed two distributors in that area. Digiland did not provide sufficient coverage to remain as a “fulfilment partner” so was dropped from the books. “We will live with it,” he said.

Some of the blame for Digiland's poor 2002 results has been laid at the door of the HP-Compaq merger. Yet, for Khoo, that merger had an effect across the channel, not just Digiland's 2000 active reseller base. “In any merger, there's going to be a challenge for the channel. A certain number of HP and Compaq distributors got re-organised and some inevitably got squashed,” he said.

However, Khoo believed the second-half would be stronger than the first, although he declined to estimate actual growth. Stronger growth was expected from Digiland's business in China, Thailand, the Philippines and Malaysia.

In Australia, wireless products and pre-built PCs and notebooks could do well although that the IT environment in general would continue to be difficult, he said.

Former Australian MD, Chin Nam Low, said he resigned in early March for personal reasons. “The IT industry has been exciting, but I came from more flexibility and creativity, in the field of electrical engineering. There were some disappointing financial results but they were not the cause of my resignation,” Low said.

Khoo claimed that Digiland's Skaf resigned this week to pursue another job opportunity.

Digiland recently signed with number three notebook and PC vendor Acer to sell $4 million of product per branch as a MasterGold Channel Partner.

Acer will give Digiland sales incentives, rewards, advertising and sales lead generation. Acer has seven MasterGold, 56 Gold, 63 Silver and 14 Retail Channel Partners in Australia. Khoo has received “a number” of expressions of interest in the MD role, but said it would still be three to six months before an appointment took place.