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Dell to make notebook PCs, expand India plant, says Felice

A local manufacturing plant of Dell Inc., the world’s second largest personal computer maker, near Chennai has built 65,000 desktop computers in the quarter ended September and plans to increase capacity of the factory by one-fourth to also make notebook computers and servers next year.

The 50-acre Dell factory at Sriperumbudur, with a planned investment of about $30 million (Rs119 crore) is the Austin, Texas-based firm’s third manufacturing facility in the Asia-Pacific region. The company began desktop production in July to address the domestic market.

As of now the plant makes only desktops, but we already have notebooks in test mode and next year, you will see Dell produce desktops, notebooks and servers out of India. The demand here is very strong. Already, our capacity equals the 4,00,000 units per annum mark and when we add notebooks and servers to the plant, the capacity will be over 500,000 units annually,” said Steve Felice, president, Asia-Pacific and Japan for Dell, in an interview here.

Felice added that though the Sriperumbudur factory is currently meeting demand from India, “there could be a day when we will be exporting from that facility as well”. Earlier this year, Dell commenced manufacturing at a new facility in Brazil, and another will open in Poland later this year.

Research firm Gartner Inc.’s principal analyst Diptarup Chakraborti said the India presence helps Dell reduce the advantage enjoyed by rivals Hewlett-Packard Co., HCL Infosystems Ltd and local units of Lenovo and Acer, all of whom have a local manufacturing presence and don’t have to pay import duties on their wares.

Dell follows a February to January fiscal year and global revenues of the firm for the 12 months ended January, stood at $57.4 billion at today’s currency rates. Of this, revenues from Asia accounted for around $8 billion. Dell does not disclose sales in India,but said its Indian commercial business grew by more than 50% in volumes and notebook sales by 85%.

Dell has four focus business areas mostly organized by geography—three units covering the Americas; Europe, West Asia and Africa; and Asia-Pacific including Japan—and a consumer business that accounts for about 15% of business. Around 85% of the business is institutional in Asia and the company is keen to expand its footprint in consumer space and be present “in high volume areas, rather than in niche areas.”

The computer maker, which has mostly sold its products directly to its consumers on phone or the Internet rather than through a retail network is also looking at a change in that strategy as it explores the retail and partner channel of doing business worldwide, particularly in Asia.
 
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