Mustek – 25 years on

It takes a great deal more than moving boxes to be a distributor of choice within the local ICT space today. Management at companies such as the Mustek Group (Mustek), comprising active operations of Mustek, Comztek and Rectron, ought to know – they recently toasted the company’s twenty-fifth year of operation.

David Kan, CEO and Founder of Mustek. (Image: Mustek)

Whilst Rectron required intervention to help steady its recent market performance – and also experienced a management restructure, the company has obviously done something right to have weathered the many storms in domestic ICT and telecoms – and mark a quarter of a century in business.

Management has stated that the consumerisation of IT calls for a new approach that integrates the demand for ‘personal’ mobile devices in the workplace, with the need for desktop security.

Smartphones, tablets and other mobile devices are creating security and integration headaches in the workplace, making it more difficult to safeguard critical data they say.

The understanding by Mustek is that for its customers in the public and financial sectors, the desktop remains an important tool for business. This is what management describes as a driver behind the development of solutions and technology.

We recently caught up with the company’s founder and CEO, David Kan, to hear what his impressions are about growth, longevity and strategy going forward.

The vision of the company is to be South Africa’s ICT distributor of choice – what is your definition of this role?

To be South Africa’s ICT distributor of choice entails fine-tuning operation procedures, creating value from economies of scale, acquiring new products (without cannibalising existing products), developing new business opportunities to grow other sources of income (such as services), and constantly ensuring that we are providing added value that is in line with our customers expectations.

A big focus for us in the coming years will be on the African continent, with already established Mustek operations in Zimbabwe, Nigeria, Kenya and we are looking at new investment opportunities in Namibia.

We spend a lot of time coaching our partners especially from a product selection point of view, to ensure that our service is standard across the board.

What have been your toughest challenges over the last twenty five years?

Most of my sleepless nights are caused by the fluctuating nature of our wonderful ZAR. It is difficult to manage this in an industry which trades in US Dollars.

Can you name a few milestones/ achievements?

Over the past 25 years, we have been fortunate to experience many exciting times along the way.

But our greatest achievement, I would say, is being listed on the Johannesburg Stock Exchange (JSE) in 1997, as well as on the Taiwan Stock Exchange in 2003.

In the past financial year, there was a major shuffle of management in Rectron (part of the Mustek Limited Group). I personally took over the coaching role and I am happy to report that under a new management team, the company managed to turn its profitability around from where it was making losses in the first 6 months of FY2012 to a normal profitability level in the second 6 month period of FY2012.

What does it take to be a successful distributor in today’s market?

The distribution market is constantly expected to generate more and more value-add services, which go beyond moving boxes. This can be maintained by good control of operating expenditure (OPEX), and leveraging these effectively with economies of scale.

The channel is forever changing, where management needs to be flexible, stay calm under pressure, work as a team and be prepared to tackle any challenge that is thrown at them, at any time.

The crystal ball question – where is Personal Computing going to be in ten years time?

I am very positive about the coming years of growth in the PC industry, especially in Africa. On the African continent, PC penetration is very low when comparing to developed continents such as: Europe orNorth America.

The main cause of this is the cost of Internet/Broadband, poor infrastructure and low computer literacy skills, especially inSouth Africa. When considering the cost of ownership of a PC over 3 years, the user spends 30% on hardware, and 70% on Internet connectivity.

I have no doubt that the cost of Internet will continue to become more affordable, to enable users to be able to spend more on hardware. I believe that this change to the cost of Internet/Broadband, as well as improvements to infrastructure and computer literacy skills over the next 10 years, will result in significant acceleration to the growth of personal computing on the African continent.

Chris Tredger