Business Daily from THE HINDU group of publications
Friday, Sep 15, 2006
Info-Tech - Overseas Investments
States - Tamil Nadu
Dell to set up facility in TN
First in India
In the first year, the facility would manufacture 3 lakh-4 lakh desktop computers.
It would assemble PC of any configuration and deliver the unit across India.
NEW COMPANY: Mr Dayanidhi Maran, Union Minister of Communications and IT, and Mr Paul-Henri Ferrand, Vice-President-South Asia, Dell, at a press conference in Chennai on Thursday. Bijoy Ghosh
Chennai , Sept. 14
Dell Inc, the US-based personal computer manufacturer, will set up its first manufacturing facility in India at Sriperumbudur near Chennai.
Of a total committed investment of $60 million (Rs 270 crore), it will invest $30 million (Rs 135 crore) in the facility in five years.
It is likely to commence operations in the first half of 2007.
It would generate about 1,000 direct jobs and another 4,000 indirectly, according to Mr Paul-Henri Ferrand, Vice-President, South Asia, Dell.
Dell signed an agreement on Thursday with the Tamil Nadu Government to set up the facility in 50 acres of land in the Sriperumbudur Hi-Tech Park.
Mr Rajan Anandan, Vice-President, India Sales, Dell, signed the agreement on behalf of Dell's Indian subsidiary with the Tamil Nadu Industry Secretary, Mr Shaktikanta Das, in the presence of the Chief Minister, Mr M. Karunanidhi, the Union Minister of Communications and Information Technology, Mr Dayanidhi Maran, and Dell officials, including Mr Ferrand.
Mr Simon Wong, Vice-President, Asia Pacific/Japan manufacturing operations for Dell, told a press conference that in the first year, the facility would manufacture 3 lakh-4 lakh desktop computers. Dell's turnover in India is about Rs 1,800 crore, of which 70 per cent comes from sale of desktop computers.
Dell in India has about 12,000 employees working in its call centre operations, research and development, and in sales and marketing, he said.
Vendors supplying materials and components to Dell are expected to bring in investment worth 4-5 times the current figure that Dell has cited, Tamil Nadu Government officials say.
Mr Anandan, addressing the media, said: "We lead the pack in selling to large companies. With local manufacturing giving us an impetus, our focus now would also be on selling to the education sector and to the Government, in addition to the small and medium businesses."
Asked how much product prices would come down with local manufacturing, he declined to give details, saying: "We are competitive and hope to gain significant advantage through making computers locally."
Mr Ferrand said Tamil Nadu's advantages, over other States, include good infrastructure, availability of skilled labour and a good business environment.
To begin with, the company would import components from Dell's manufacturing locations, including Penang in Malaysia and Xiamen in China.
However, in future, it would source components from companies such as Flextronics and Foxconn that are setting up plants in Sriperumbudur, he said.
The computers from the new facility would be sold mainly in the domestic market.
Later, speaking to Business Line, Mr Ferrand said that having a manufacturing facility in the country would cut down the delivery time by at least a third. Currently, the company takes 12-13 days to deliver from the time of receipt of the order, with all its products being imported from its plant in Penang, he said.
"Once we begin manufacturing here, it should reach the customer in India in three to four days."
Dell sells computers through the Internet. A consumer, visiting its Web site, can order a PC of any configuration. Dell would assemble the customised PC at Sriperumbudur and deliver the unit across India, said Mr Ferrand.
Mr Kip Thompson, Vice-President, Global Facilities, Dell, said that India, with only two per cent PC penetration, offers enormous opportunity to sell PCs.
The country's huge small and medium business is also the immediate market to target, he said. Dell's global revenue for the last four quarters was $57.4 billion.
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