Role Model: George Thomas, CEO, Aldous Glare Trade & Exports

 Amit Singh, CRN, June 26, 2012, 1200 hrs

An economics graduate from Mahatma Gandhi University, Kerala, George Thomas, CEO, Aldous Glare Trade & Exports (AGTE), has two passions—soccer and work. So passionate is he about his company that he named his son Aldous and daughter Glare.

Thomas started as a small-time reseller of printers; today he is one of the biggest distributors in south India with more than 3,000 partners spread across Kerala, Karnataka and TN. Headquartered in Kochi, AGTE has branches in Thiruvananthapuram, Coimbatore, Chennai and Bengaluru.


The beginning
Coming from a family of farmers, starting a business was not easy. To understand the nitty-gritty of the business, Thomas worked as a software programmer in a software development firm for two years after completing his PGDCA in 1989. He also worked as freelance software programmer after leaving the job in 1992.

Thomas formed AGTE in 1995 by reselling HP printers. “Redington started its India operations in 1993 and was expanding base in the south. We were the first company from Kochi to be associated with Redington and still have strong relations,” he says.

The company expanded its printer portfolio by including Godrej printers in 1997. Till early 1998, AGTE was reselling printers as well as offering system components and software development on demand.

A major turnaround came in 1998 when Thomas took a 3-month break to analyze his business. “I realized the need to remain focused in order to take the business to the next level. Since distribution was our core business, I decided to discontinue other businesses.”

The company downsized its employee strength from 40 to five. Expanding its focus on distribution, AGTE included Epson and Wipro printers as well as Samtron (Samsung) and Microtek monitors in its offerings.

Thomas also transformed the execution of business into a team effort. “I empowered the core team and made them responsible for their respective tasks. I also distanced myself from daily operations and focused only on strategic tasks,” he explains.

This approach enabled the company to grow its revenue from Rs 1.5 crore in 1998 to Rs 5 crore in 1999. In 1999 AGTE strengthened its portfolio by including Intel processors and motherboards, and Mercury cabinets and keyboards. The company also became an exclusive sub-distributor for Samsung HDDs and drives in Kerala.

These partnerships helped AGTE garner Rs 30 crore in 2002. Explains Thomas, “Samsung, Intel and HP were growing at a rapid pace and that enabled us to grow. Moreover, selling only through partners facilitated expansion since partners were comfortable buying products from us unlike other distributors who also had their own retail outlets.”

The company saw another turnaround in January 2003 when it stopped operations for three months to introspect on its strengths and weaknesses. “We realized that we were just reselling and fulfilling the requirements of customers with little or no sales efforts,” Thomas recalls.

AGTE restarted operations in April 2003 with renewed focus on developing its sales strength by offering some lesser-known brands. It started distributing Maxtor HDDs, Frontech cabinets and keyboards, BenQ monitors and keyboards, and the Microsoft mouse. The company also discontinued distributing all the other brands except HP and Intel.

In 2006 the company partnered with Samsung, Epson and Acer for notebooks and monitors, Compaq for PCs and notebooks, and Canon and TVSE for printers. It also became the regional distributor for Lenovo notebooks.

Current business
AGTE grew its topline by 57 percent from Rs 111 crore during FY2009-10 to Rs 175 crore in FY2010-11 to Rs 245 crore in FY2011-12. Growth in the last two years was triggered by a plan to expand into the other southern states. “We realized that our growth would be limited if we confined our presence to just Kerala. This prompted us to set up offices in Bengaluru and Coimbatore in FY2009-10 and in Chennai in FY2010-11,” says Thomas.

In FY2010-11 the company became a tier-1 distributor for Asus notebooks and HCL PCs and tablets. It also became an exclusive distributor for AOC and Viewsonic monitors in Kerala.

AGTE also came up with the Retail Partner (RP) program and Exclusive Regional Partner (ERP) program in FY2010-11. An ERP gets exclusivity for a small town and region, and the company ensures that all its resellers in that area buy through that partner. AGTE-managed channel schemes were another driver for growth. In 2010, during Onam, a scheme called ‘Buy & Fly to Malaysia’ was launched; it saw more than 20 partners flying to Malaysia. Besides, around 15 partner events were conducted during the year across Kerala alone.

Best practices
AGTE has a Website for partners to inform them of price changes of over 500 fast-moving SKUs; the site is updated daily. The implementation of Tally ERP in late FY2009-10 paid rich dividends with timely reports on collections and aging stocks. The strict practice of collecting post-dated cheques and ensuring that stocks which have aged beyond 30 days are cleared on a priority improves the rotation of cash.

The company also focuses on keeping costs low by maintaining a lean, mean and efficient team. “While we do not compromise on the quality of manpower, we are not overstaffed either. Our goal is to keep the entire cost of operations to less than 1 percent of revenue,” says Thomas. In no branch are stocks planned for more than seven days, and the sales target to clear 25 percent of the stock on the day it lands has helped lower inventory.

About 10 percent of the net profit every year is invested for soft-skill and technical training, holding quarterly meetings of business leaders, and employee-oriented recreational activities.

Thomas says that being a coach you need to trust your team. “I empower them completely to execute on the field the conceptualized strategy. I have created a strong team of second-line managers, and empowered them to take all the decisions, including signing cheques.”

Riding on such practices, the company won various awards including Epson - Top Performer South India in 1999; Samsung - No 1 Performer Kerala in 2001; CRN - Best Sub-Distributor National in 2003; Intel - Top Performer Kerala in 2004; Compaq Best Sub-distributor and HP Channel Excellence award in 2006; Intel - King of Kerala and Acer No 1 Notebook Partner in 2007; Toshiba Champion of Champions award in 2008; CRN - Best Sub-distributor South in 2009; and Seagate - Best Sub-distributor and CRN Outstanding Performance-Distribution award in 2011.

Future strategy
The company aims to garner Rs 1,000 crore in FY2015-16 riding on its extensive plans for geographical and portfolio expansion. AGTE is now focusing on tier-1 relations with vendors including the lesser-known brands. It has also started an import business and is currently importing Apotop memory modules, SSDs and Mac accessories from Taiwan. “We will soon introduce tablets, AIOs and storage products sourced from global markets,” informs Thomas.

The company believes that tablets and smartphones will outnumber notebook and PC sales in the near future.

AGTE also started AG Care, its servicing division, in 2012 to provide warranty support for Asus, Chirag Computers and Apotop.

The company will open a branch in New Delhi soon and in Mangalore and Hyderabad later in this year. In addition, it will open a branch in Mumbai in 2013.

Thomas also expressed his desire to enter IT manufacturing after FY2015-16.

On a personal note
Thomas considers Redington as his role model organization. “Being associated with Redington since the beginning gave me the opportunity to observe various ups and downs with the company. During our association we learned many things and copied many of their working models.”

He considers soccer as his first love, and has been to soccer tournaments in Milan, Barcelona and Liverpool. He has also witnessed soccer World Cup matches in 2002, 2006 and 2010.

In addition, he loves watching action movies such as Gladiator, Rocky and Braveheart, and drama like The Pursuit of Happyness and The Shawshank Redemption.

Besides this, he also likes to read management books such as Good to Great, Built to Last and Great by Choice by James Collins, as well as biographies on Alexander, Napoleon Bonaparte and Barack Obama.

While Thomas does not like driving a car, he wishes to own a corporate jet by 2020. His dream holiday locations are Peru and Brazil, and a perfect weekend is time spent with family and friends