Chs Electronics Inc.
Dow Jones Newswires -- November 6, 1998
CHS Electronics CEO: Growth Opportunities Greater Abroad
NEW YORK (Dow Jones)--A smaller percentage of personal-computer ownership per capita in foreign markets presents greater opportunities for growth than the U.S. market, according to CHS Electronics Inc. (HS) Chairman and Chief Executive Claudio Osorio
In an interview with CNBC Friday, Osorio explained that the PC penetration rate per capita outside the U.S. is at about 10% compared with a penetration level of 45% to 46% in the U.S.
"There is a long way from 10% all the way to the 45% to 46% growth in the U.S.," Osorio said. "The growth in the U.S. can never match the opportunity we have outside the U.S."
The executive noted that there are fewer personal computers per household abroad because of a lack of disposable income. Also, he added that in emerging markets, there is a lack of automation and investments in information technology usually take a back seat to other purchases.
"These markets have about 1/4 the PC penetration rate there is in the U.S. The low PC prices, or the prices coming down on PCs, actually grows or makes the universe of potential buyers a lot bigger," Osorio added.
Osorio said revenue growth in Europe, whence CHS derives about 75% of its revenue, currently is "quite strong."
He added that margins in Russia have "increased sharply" in the last three months.
The executive refuted comments by analysts that CHS won't be able to continue to fund its expansion plans until credit markets calm down.
"We are continuing with our process of acquisitions, but we believe, at least in the European market, we have completed most of the significant acquisitions that we wanted to make," he said.
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