A component testing and re-export plant in Dubai is next in line
The UK based component manufacturer is looking at setting up a testing and packaging plant in Dubai. At present Integral manufactures its products in Taiwan and ships them to UK. At the plant in New London each of its products is then quality tested and shrink wrapped and sealed for forwarding to 55 other countries.
“The problem is you need volumes to do that and we are trying to build volumes”, says Integral Memory’s Sanjiv Kotecha, speaking at DCC 2011. If the trading volumes across the UAE and the region go up, the products will be bulk shipped from Taiwan to Dubai, loosely packed in trays. At Dubai the products will be quality tested, repacked and made available for re-export. Since Dubai is better placed for re-export than London, with cheaper labour costs, “that will be the ultimate aim”, says Kotecha.
The Dubai plant investment is expected to be around $0.2million. Similar to the UK setup, Kotecha expects to use the spare capacity of the proposed Dubai plant to pick up local orders for component testing and packaging. “We are always being asked to do other peoples stuff”, referring to the testing and packaging contracts, managed by the 50 employee team in New London.
Other than the gulf, Kotecha has his eye set on India as the next target destination. “That is a fantastically growing market”, close to Dubai and can also be serviced from Dubai.
Integral currently has offices in Spain, France, Portugal and Netherlands as well as UK and UAE. The current product range includes memory cards, mobile memory, USB flash drives, encrypted USB drives, card readers and adapters and DRAM memory chips.
Integral expects its new solid state drives (SSD), encrypted flash drives, USB 3.0 flash drives and micro SD to drive growth in the region.
The SSD are made from flash layer technology using an additional linear dimension. They have no moving parts, consume less power and generate less heat. At present however they are about 3-4 times more expensive than conventional storage devices. “For people who understand technology and the early adopters this product has an immediate market”, says Kotecha. As the price drops this product segment is expected to compete and overtake sales of conventional external and internal storage devices. “The Ipad is all SSD”, Kotecha points out.
The other differentiated product from Integral is the encrypted USB. With corporate data loss, a serious legal issue in UK, the research and development team in the country came up with a password protected USB. “Research shows that most users lose their flash within the first year of usage”. The encrypted USB from Integral has a hardware set password that cannot be deleted. Incorrect entry more than six times triggers erasing of the stored data.
About the other products, micros SD are now used in tablets, smart phones, cameras and other consumer devices. With the exploding consumer market for smart-phones and tablets in the region, the company is bullish on its 32GB product in this segment. The faster USB 3.0 is expected to be available from middle of 2011.
In the UAE, Integral uses Touchmate as its distributor. Holding stocks for flash memory is usually the trickiest amongst channel partners due to volatile pricing and life cycle. But since Integral only manufactures this product segment, it is ready to take the risk and hold the stock for its partners. “We are used to it” says Kotecha, “and we can handle the risk of holding the inventory”. It also has considerable experience working on promotions with European super retailers like Tesco and Asda including two-for-one and bundled offers. If Kotecha gets the UAE volumes to shoot up, India and the rest of the region are logical next steps.