Is Inspan winding its operations?

Chennai: In this time of economic slowdown, rumors about
impending shutdown are something that most distributors and channel
partners are forced to handle. The recent one being that Chennai-based
distributor Inspan Infotech is winding up its operations in the
country. The news started when the distributor shut down some of its
branches.

When contacted, S Sudhir, MD, Inspan Infotech agreed that the
disti has consolidated its sales operations by making changes to its
logistics operations but refuted that they were looking at winding up
their distribution business. The distributor has closed down three of
its branches in Baroda, Surat and Ghaziabad after analyzing whether
those branches were required, and also in a bid to reduce unwanted
overheads.

Clarifying their stance, Sudhir said that the company was only
taking cautious decisions to reduce unnecessary overheads at this time
of slowdown. "We are committed to all our vendors, customers, channel
partners and employees, and hence we have to be operationally cost
efficient. Only by giving our channels the price advantage can we
provide support to them. We did some correction process in logistics
and products. I am sure that the channels will enjoy the benefit of the
correction. If the number of branches one has is being seen as a yard
stick, we are not far from the biggest distribution company in the
country," countered Sudhir.

However, contrary to what a few sources in the market are
saying, Inspan has recently expanded their network. The disti recently
added Kolkata, Patna and Guwahati in the East, to its network, and now
has a total of 25 branches across the country. Sudhir said that the
company has done good planning and been able to maintain their
overheads while expanding, and were also making all efforts to
establish their presence in each of the regions. "Today we work with
3,000 channel partners across the country, all of who have been part of
the organic growth story of Inspan. The expansions are an ongoing
process for a company at our stage of growth. As more and more
locations need local presence, we will add branches. Wherever it is not
needed, we have rationalized too," he pointed out.

According to Sudhir, in a short span of eight years, Inspan
has been able to create a niche for itself in IT channel business in
India. He attributed this success to their focus on delivering values,
applying innovations in technology distribution, maintaining superior
intellectual capital and applying market orientation to the business.
"Last year we grew by 60 percent, which was double the industry growth
rate, and this year our plan is to consolidate the growth and stabilize
our systems and procedures. The exchange rate, of above 20 percent, put
us under considerable pressure, and this made us relook our product
mix. We consolidated our product portfolio and downsized it to a select
product portfolio which made business sense during a sluggish economy,"
he claimed.

Accepting that Inspan was no exception to the impacts of
global slowdown, due to parts of its business being intricately linked
to vagaries of dollar prices, which put pressures on margins, Sudhir
said that the downturn had given them an opportunity to revisit some
product lines and focus on them. Rupee depreciation and hike in import
prices made the company consciously drop narrow margin products which
were preventing the company from passing value adds to channel
partners.As far as the upcoming fiscal year is concerned, Sudhir shared
that more products would be added to Inspan's portfolio. However,
Sudhir said that it would be too early to give details about it at this
point of time.

The company plans to associate itself with components that
have better margins and so focused more on Mercury, Transcend and
Corsair memory modules, which offer good business. Inspan has a focus
on the desktop market. It added BenQ notebooks to its distribution
portfolio last year. The other products that it added recently to its
portfolio include iXA, Transcend and Corsair.