Lenovo Group, the world's third-largest and China's No 1
computer maker, yesterday said it will spend $30 million to build
two factories and operation centers in India and Mexico, as it sees
emerging markets and the United States as growth engines.
The Chinese firm has just announced two other operation centers
in Shanghai and Whitsett in North Carolina. Currently it has four
factories in China and one in India.
Gerry Smith, senior vice-president of Lenovo in charge of its
supply chain, said his company would scout for locations in Central
and Eastern Europe for more factories.
The new factories and centers are some of the latest moves that
the computer firm is making in trying to turn around its
loss-making American and Asia-Pacific businesses.
"We are investing in the future with these two new factories,"
said Smith in a statement. "They will help us achieve our
world-class manufacturing capability in China and extend that to
the world."
The Indian factory and center will be located in Baddi in
Himachal Pradesh state. It's expected to be partially operational
by September and assemble 2 million computers a year. Lenovo will
employ 350 people in Baddi.
Currently, Lenovo has its only overseas factory in Puducherry in
southern India, which was also inherited from IBM after Lenovo
bought the US giant's computer unit two years ago.
India is regarded as a priority by Lenovo as it wants to copy
its success in China in other emerging markets.
In its 2007 fiscal year ending March, Lenovo said its sales in
the South Asian nation rose by 30 percent, compared against 20
percent of the market growth. It made operating losses of $1.28
million in the Asia-Pacific region, dragged down by poor Japanese
sales.
Another new factory and center, located in Monterrey in
northeastern Mexico, will be Lenovo's largest investment overseas
with 750 employees. The facility will be ready by the middle of
next year and produce 5 million computers annually for both North
and South America.
In 2007 fiscal year, the Americas accounted for 28 percent of
Lenovo's total sales, only after the Chinese market, but the
business in the US recorded losses of $27.54 million.
In April, the computer giant said it would lay off 1,400
employees worldwide, including transferring 750 jobs to emerging
markets.
Lenovo is leading competitors like HP and Dell by a large margin
in China, but has to turn around in mature markets like the US.
(China Daily July 27 2007)
