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)
