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Electronics Production | December 05, 2011

Tech Data to stop Brazilian operations

Tech Data Corporation has announced it will cease commercial operations in Brazil, citing the countries cumbersome regulatory environment.
In a press release aimed at investors, the company said ”(t)he closure is due to Brazil's complex tax, legal and regulatory environments which make it difficult for the Company to generate a sufficient return on invested capital.” 

"Despite our team's best efforts, the complexities of operating in Brazil have prevented the Company from attaining the level of profitability needed to earn an adequate return on our investment," said Robert M. Dutkowsky, chief executive officer, Tech Data Corporation.

Operations will cease by January 31, 2012 but Tech Data will maintain a legal entity in Brazil to address its fiscal and legal responsibilities. The company also said it will continue to serve the Brazilian market through its Miami export operation.

As a result of the action, Tech Data estimated it will incur operating losses and other charges in the fourth quarter of 2012 of approximately $22 million to $25 million.

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