Same aims, different paths for Altron companies
Bytes CEO Dave Redshaw says although foreign growth is crucial, “our base will always be SA and the majority of our business will always be here”.
Altech CEO Craig Venter says competitive global markets demand the significant geographic footprint that Altech is determined to create.
Different words, but the result is the same. Bytes aims to generate 30% of its revenue and 25% of its profits from abroad, to diversify its risk and create greater growth potential. It has already surpassed that on the profit side, although the fact that 30% of its interim operating profit came from abroad was partly due to a diminished performance in SA, which should pep up in the next six months.
Venter wants a third of Altech’s profits to be made offshore, and says that will be achieved within a year.
Perhaps Venter’s more vocal support for global expansion comes because several Altech divisions already have a dominant market share in their home turf, so foreign moves are essential for them to continue growing.
Bytes, meanwhile, still has work to do at home, where its local operations suffered a 12% dip in profit. So although Bytes is making strong efforts to bulk up in the UK, it cannot afford to be complacent in SA.
Frost & Sullivan analyst Letticia Nkumbula says acquisitions are important in diversifying risk, and its wide range of divisions let the high performers offset the underperformers.
She believes Bytes should look more closely at the opportunities in Africa’s hi-tech sector.
That idea does not appeal to Redshaw. Business in Africa is still iffy, he says, with the technology resellers appointed to buy its equipment often struggling to pay. Bytes will not pare down its African operations, but neither will it try to expand them.
Altech, on the other hand, sees great opportunities in Kenya, where it is making a R500m bid to buy into three companies carrying data traffic in Kenya, Tanzania and Uganda.
In the IT game, Altech and Bytes are sensible to go where the money is, and that means knowing where the demand for their technologies, products and services is strongest.
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