Avnet looks forward to 2009

Avnet chief executive Roy Vallee is feeling confident for 2009, despite the looming clouds of recession over the industry.

Speaking to CRN, Vallee said the global distributor has shrewdly been “improving its return on capital” and concentrating on its credit rating, rather than falling into the credit trap, which stands it in good stead to emerge even stronger from the other side of the storm.

“All the while people were asking us why we were doing that, and ‘who cares about credit rating?’” he said. “But now is the time that access to the credit market is key.”

“Broadly speaking, distribution has done pretty well,” he added. “There has been more attention paid to the right financial metrics and the inventory management processes are as good as they have been. Companies are being much better managed. Overall we as an industry have come a long way.

“Coming into 2009, there will be some players that are either small and don’t have the wherewithal or good access to credit markets, and some that fell into the same trap as the banks. There are many in the channel that have listened to the siren song of credit and have not thought about the consequences or what if,” he said.

He added that the distributor would not be ruling out further acquisition in both developed and developing markets, and would be working with its wide vendor base next year to extend relationships into new geographies and verticals.

Vallee also said that Avnet would be unafraid to recover freight costs from customers.

“We must get compensated and recover those freight costs. Nowhere in our value proposition is the desire or ability to absorb freight. We are working on ensuring that we have the right processes and systems in place to keep costs down,” he said.

Vallee also had some words of advice for resellers concerned about the tough times to come.

“The most important thing is not to get distracted and stay focused on delivering value and solutions," he said. "End users, even if they tighten up a bit - if you have a projects that you are working on it will still need value. The end users will make investments and if you think along those lines you are still going to get the business."