Dell says India plant to be operational by end-2006

NEW DELHI  - Dell Inc. expects its proposed Indian plant to begin production by end-2006 and help the world's largest personal computer maker to win share in a booming market by cutting delivery time.

"We would like to have this manufacturing facility up and running within this year," Paul-Henri Ferrand, Dell's vice president for South Asia, told reporters on Thursday. He did not say where the plant would be set up or how much Dell will invest.

"Local manufacturing will enable us to have the same supply and delivery chains as we have in many other markets."

Texas-based Dell has a 5 per cent share of the Indian market, which is estimated at 4.6 million units a year and is growing nearly 30 percent annually.

Dell said its revenue from Asia's third-largest economy surged 40 percent to $80 million during February-April, from the same period a year ago.

India will be the seventh location where Dell has a plant. It has two manufacturing sites in China and one in Malaysia in the region, where demand for computer hardware is soaring due to relatively lower penetration rates compared with western markets.

Dell, which pioneered a direct delivery model, competes with global players such as Hewlett-Packard Co., International Business Machines Corp. and local giants like HCL Infosystems Ltd. and Wipro Ltd. in India.

There is strong demand for computers from the fast-growing banking, financial services, telecoms and information technology industries that are automating business processes and setting up nationwide IT networks.

Falling prices, cheaper finance and rising salaries are also fuelling retail demand for desktops.

It takes Dell about 10-15 days to ship a product to an Indian customer because of the time taken in transportation from either Malaysia or China and then clearing customs.

The delivery time will be cut to 3-4 days once the Indian plant is fully functional and lead to substantial cost savings as transportation costs and duties will come down dramatically, said Rajan Anandan, vice president of sales for India.