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Dell to manufacture PCs in India

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DQW Bureau
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DQW News Bureau Chennai, Sep 14

Tamil Nadu, and Chennai city in particular, got a major boost to its growing
popularity in IT and telecommunications space, with Dell announcing plans to set
up a manufacturing facility in Sriperumbudur, a technology hub near the city.
Dell announced this after entering into a formal agreement with the state
government of Tamil Nadu, in the presence of M Karunanidhi, CM, Tamil Nadu and
Dayanidhi Maran, Union IT and Communications Minister. The event gets
significance in more than one ways as this is the first PC manufacturing
facility in Chennai/Tamil Nadu, and the first manufacturing center for Dell in
India (third in Asia-Pacific/Japan).

“We are proud to be here and dedicate this facility to India, where we have
grown manifold in the last six years. Dell had a blazing growth here to reach Rs
1,800 crore turnover in the last fiscal, all through our popular direct model of
selling. The upcoming manufacturing unit at Sriperumbudur will primarily cater
to the requirements of domestic market, before looking at any export options.
The production (product roll out) will start from first half of next year,”
said Rajan Anandan, VP and GM, Dell India.

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Shaktikanta Das, Industry
Secretary to Government of Tamil Nadu (extreme left) exchanging the MoU
with Kip Thompson, VP - Global Facilities, Dell (second from right), in
the presence of Dayanidhi Maran, Union IT and Communications Minister; M
Karunanidhi, CM, Tamil Nadu and Rajan Anandan, VP and GM, Dell India

Dell's revenue grew 63 percent, while unit growth was at 82 percent in the
most recent operating quarter. It also became the number one PC brand among
large corporate (organizations with more than 1,000 employees) and claims to
have achieved a marketshare of 45 percent in Q2 this year, in the same segment.
Now, the company wants to replicate its success in other segments too, such as
government, education, SMB and consumer markets.

“The manufacturing facility in India will mainly offer three benefits for
us and our customers - direct delivery of products to customers from local
facility, fastest lead time in the market and increasing value by saving cost.
It will help us offer products at a very competitive price,” said Paul-Henri
Ferrand, VP and GM - South Asia, Dell Asia Pacific. Dell has earmarked a total
investment of $60 million for Indian manufacturing facility, which will be spent
in two stages of five years each. The project will provide direct employment to
about 1,000 people, and indirect employment to more than 4,000. “We chose
Chennai/Tamil Nadu for its conducive business environment, talent pool,
infrastructure and connectivity reasons,” Ferrand added.

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According to Shaktikanta Das, Industry Secretary to Government of Tamil Nadu,
“Dell has directly contributed to the country's GDP, wherever it started its
operations. And big ticket investments like Dell and Nokia in Tamil Nadu will
spur the growth of other industries in the state.”

Reinforces intent to
continue with direct model strategy

Dell has denied recent rumors
that it is secretly rendezvousing with the Indian channel community to
push its products here. Speaking on this, Rajan Anandan, VP and GM, Dell
India said, “I really wonder who spread this rumor. Dell has been and
will always be a 100 percent direct model company in India or anywhere in
the globe. Dell is quite successful worldwide with its popular and unique
direct model selling, and growing customer base is a proof to it. India is
no exception. In fact, our revenues consistently grew in the last six
years and today we are a Rs 1,800 crore company in India. How would we
have achieved it if our direct model was not popular here?”

“Dell is committed to
bring latest technologies to the masses and Indian consumers have shown
greater adoption of our direct model. 
Our system provides better access with the customers and chance to
understand their requirements well. We are giving what the customer wants
(customized solutions) through this model,” said Paul-Henri Ferrand, VP
and GM - South Asia, Dell Asia Pacific. The company feels direct model
can only offer better support and service to the customers.

In India, desktop
business contributes nearly 70 percent to the company's total annual
revenue of Rs 1,800 crore, in the last year. “Soon, we are going to
bring many exciting products to India, mainly targeting the home, SOHO,
SMB, educational institutions and government segments. But, everything
will be sold through direct model only,” stressed Anandan.

“I am happy that Dell chose India to set-up their sixth manufacturing
facility worldwide. And very happy that it chose Tamil Nadu. Overall, Indian
states are becoming very competitive and vying with each other to attract more
MNC investments/projects, which is a good sign for economic growth in the
country. Tamil Nadu has already created the right ecosystem to attract more
investments in the state,” said Maran.

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