The Hindu Business Line : Dell to add 5,000 more employees in India

BULLISH on India, the world's largest PC maker Dell on Monday announced it would add 5,000 employees to its Indian operations, taking the workforce to 15,000 over the next two years. Dell is also looking at establishing a manufacturing facility in the country to boost its existing four per cent market share.

"The time is right to consider a manufacturing site in India. India currently sells four million computers per year and this is projected to rise to 10 million units annually in the next 3-5 years. Our workforce here is capable and the time is right for the second phase of expansion in contact centre activities, research and development and consideration of a manufacturing site," the visiting Dell Chief Executive Officer, Mr Kevin Rollins, said at a conference here.

Mr Rollins, who met the Prime Minister, Dr Manmohan Singh, on Monday said that Dell would soon start a dialogue with the Centre and State Governments to finalise a location for manufacturing on parameters such as logistics, workforce, and co-operation of the local authorities.

"I mentioned to the PM today that we will continue to expand from point of view of services, market base, and manufacturing, primarily for India use. He was supportive of our plans. On our part, we said that when Dell locates in a community, there is a whole eco-system that forms around our operations, entailing suppliers, logistics and other partners," he said, but did not divulge the timeframe for the manufacturing plans.

Mr Rollins declined to comment on the investment for the manufacturing unit saying, "When we start, we put some investment and then build it up. Ours is a measured and systematic company, so we expand in that fashion." A plant in India would be Dell's third in Asia after China and Malaysia. The company currently has plants in the US, Brazil, and Ireland, besides Malaysia and China.

Dell's plan to manufacture computers in India would help it gain a share from market leaders Hewlett-Packard and HCL Infosystems in a nation where computer sales are forecast to rise 29 per cent in the year to March 31, 2006, to 4.7 million units. Dell is hoping that the manufacturing plant would help increase its market share in India to at least 10 per cent from the existing four per cent. The company has a market share of 10 per cent in Asia and 18 per cent globally, Mr Rollins said.

The Texas-based company said it is vital for India to build its infrastructure. "Where we locate is also based on incentives. We are in a global marketplace, and it operates on its unique economies. So we continue to look for good co-operation from the Central and State Governments," he said.

Increasing headcount As part of its expansion plans, the company will establish a customer contact facility in Gurgaon. Dell has similar facilities in Bangalore, Hyderabad, and Mohali that are part of a 30-site global customer contact network. The centre in Gurgaon is expected to add 700-1,000 positions to Dell's India employment by the end of 2006, first from a temporary location, which will open in April, and thereafter from a 250,000 square foot built-to-suit location.

While the company employs 3,000 professionals in Hyderabad, the headcount in Bangalore and Mohali are 5,000 and 2,000, respectively. "We see the workforce increasing to 15,000 in the next two years," he said.

Dell will also double the size of its India-based product development team during the next two years based on its success in supporting the company's enterprise systems. Currently, over 300 Dell product group engineers are engaged in developing and testing enterprise products, including servers and storage systems.

Direct sales model So far, customers in India cannot order Dell PCs from the company's India Web site due to regulatory bottlenecks. "We are talking to the Government for clarification on what is construed as online, retail, single brand and multi-brand activities," Mr Rollins said. He hoped that recent Cabinet decision to liberalise the FDI regime further by allowing up to 51 per cent FDI through the Foreign Investment Promotion Board route in single brand retail shops would address the existing situation.

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