Ingram cultivates wilted Tulip plant

Purchase Begemann invests in joint deal to rescue Dutch vendor.

Dutch manufacturer Tulip has been bailed out by an unprecedented deal with Ingram Micro and investment group Royal Begemann, leaving the distributor with the manufacturing facility and the potential title of OEM.

The Begemann Group will finance Tulip's operations in order to keep the brand alive. Ingram will take over the manufacturing facility. The deal is due to be finalised on 8 June.

Ed Pensel, senior vice president of global channel assembly at Ingram, revealed: 'The plant came up at the right time and it fitted our needs.

We will manufacture PCs on behalf of our OEMs and Tulip. We have stated it is not our policy to compete with our OEMs. There will not be Ingram badged PCs.'

Graeme Watt, managing director of Computer 2000, commented: 'An OEM agreement will be strategically risky. But it is a significant investment, it's not just dipping a toe in the water. It could be viewed as vertical consolidation in the market, a distributor becoming a manufacturer.'

Tulip's under-utilisation of the facility was noted by Pensel, but he was confident that Ingram would manage the facility successfully. 'Once finalised, we can roll out services that enable us to offer bigger systems to OEMs such as HP, IBM and Compaq. It will also allow us to offer the reseller a build-to-order option with a 48-hour turnaround, allowing them to compete with Dell and Gateway.'

George O'Connor, analyst at IDC, pointed out that Dell had forced companies to look at the supply chain and its management.

'In channel dynamics, it's economies of clout - he who is biggest wins.

It's about who understands the consumer best and how to meet those demands.

That means moving the manufacturing process further forward in the channel.

Ingram's move is a signpost for the future - it's the way the market will go.'

Neal Grayston, Tulip UK managing director, said: 'Our priority is to lift ourselves out of administration. The administrators have been as flexible as they can. Most of our dealers are genuinely concerned and have convinced their customers to delay orders until this is sorted.'