NEC, Packard Bell NEC To Unify Asia Pacific Operations

Posted on November 10, 1999 
Filed Under Julian, Newsbytes

By Julian Matthews

NEC Computers International BV, a newly named company to push the NEC and Packard Bell brands globally outside of Japan and China, will merge all its Asia Pacific operations by the year 2000.

“The PC and server business will gradually be integrated into one organization starting from this year. This current development has begun in Singapore, Australia and New Zealand offices, to be followed by operations in Malaysia, Taiwan and Hong Kong,” said Wim Giezenaar, vice president and managing director of Packard Bell NEC, Asia Pacific, Middle East, Australia and New Zealand.

Giezenaar said, however, that NEC subsidiaries will continue its direct systems integration business in the region, which includes PCs and servers.

The announcement comes in the wake of massive layoffs last week of Packard Bell NEC’s US unit and withdrawal of the Packard Bell brand from retail shelves there.

Giezenaar confirmed the company will continue to sell PCs under the Packard Bell brand name outside the US, and still target home users while the NEC brand products will be for corporate and public sector users.

“Holding two strong brand names, NEC and Packard Bell, for distinctive markets giving us an advantage over our competitors,” he said.

Packard Bell NEC has been manufacturing Packard Bell and NEC brand desktop PCs and notebooks from its Penang plant in Malaysia since 1997 for export to Asia Pacific countries (excluding Japan), as well as Australia, New Zealand and the Middle East.

The sales organizations for Packard Bell NEC and NEC were separate prior to the announcement.

The company previously stated it will also not layoff any of its combined staff of 220 in the Penang plant and sales offices in the region “for the moment.”

Giezenaar acknowledged integrating the two different organizations will be time-consuming but it will definitely be finalized by the end of 2000. “Synergy is cost effective and will benefit our customers,” he said.

NEC earlier today issued a statement it would created new entity NEC Computers International BV (NEC-CI) before year-end that will consolidate and assume leadership of its PC/Server business globally, excluding Japan and China.

NEC-CI will include the assets of Packard Bell NEC Europe, Packard Bell NEC Asia-Pacific, NEC Asia-Pacific, and a new entity to be formed in the US, called NEC Computers, Inc.

Michel Fromont was named NEC-CI’s president and chief executive officer (CEO). He was appointed president and CEO Packard Bell NEC Europe in a reorganization in February this year and joined Packard Bell in 1994. He was formerly with Tandon Corporation in the USA and Rhône-Poulenc Systems.

Fromont stated the strategy of the new entity is to offer “a full homogeneous product line and a worldwide service structure to meet clients’ new expectations.”

Besides PCs, servers, and Internet solutions, NEC-CI will also join forces with other NEC companies worldwide as well as independent software vendors to penetrate corporate system integration and services markets.

In the US, NEC-CI will take control of the NEC branded personal computer and servers business, mainly targeted at corporations. Jeff Cooke will continue to lead North American commercial operations as president and chief operating officer (COO).

In Europe, NEC-CI has a profitable PC and server business operated by Packard Bell NEC Europe since 1997. Packard Bell is the No.1 brand name in the home PC market in Q3 99 for Western Europe with 12 percent market share and in the top 5 home PC vendors in 9 Western European countries, according to Dataquest.

NEC-CI expects to exceed $2 billion in revenue in year 2000.

NEC Corporation employs 150,000 people around the world and saw net sales in fiscal year 1998-99 amount to 4,759 billion yen ($45.41 billion)

Exchange Rate: $1 = 104.74 yen

Published in Newsbytes, Nov 10, 1999.

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