CEO interview: Digi-Key builds for the future: Page 3 of 3

December 12, 2017 //By Peter Clarke
CEO interview: Digi-Key builds for the future
Broad-line distributor Digi-Key (Thief River Falls, Minnesota) is on the rise. Digi-Key had global sales of $1.84 billion in 2016 and in preparation for a busier future it is quadrupling the size of its distribution facilities in Thief River Falls, Minnesota.

And Europe is undoubtedly a hot market for Digi-Key. Rather like IoT the fragmented nature of European market suits the prototype-to-production philosophy of Digi-Key. It was Larson, when he had been president of the company that had brought Digi-Key into Europe in 2003 starting in the UK. "The European market is so well-aligned with Digi-Key's business model it would be almost be a sacrilege not to pursue it," he said. Digi-Key has recently added a number of Eastern European countries and currencies to its activities.

And the European markets are some of Digi-Key's strongest. Digi-Key expects to hit $60 million sales in UK in 2017, up 36 percent; Germany should generate $100 million of sales in 2017, up 39 percent; and Digi-Key's French market is due to grow 33 percent to about $31 million. In 2017 Digi-Key added website support for an additional five European currencies; the Polish Zloty, the Swiss Franc, the Czech Koruna, the Hungarian Forint and the Romanian Leu. Overall Digi-Key's European sales are expected to grow 38 percent in 2017 to reach $427 million.

However, it should also be observed that Digi-Key is expecting sales into the Asia-Pacific region to go from $243 million in 2016 to $396 million in 2017, an increase of a staggering 63 percent.

Room for growth: Source: Digi-Key

What can be expected from Digi-Key over the next few years is expansion while maintaining the centralized distribution model. And that involves expansion at Digi-Key's headquarters campus with the construction of a 2.2 million square foot building, nearly four times the size of Digi-Key's existing building on the site. There's going to be a lot of automation and it is expected to be in use by the end of 2019.

As Larson and Doherty expect it will be in place in time there to serve increased distribution sales in IoT and other low- to mid-volume applications using the single-point distribution model sending components in increasing numbers to the Europe and Asia.

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