 Dell invests $ 60 million in Chennai
 Dell will invest $ 60 million in the proposed mnaufacturing facility at Sriperumbudur, near Chennai, its vice-president of South Asia, Paul-Henri Ferrand, said in Chennai on September 14, 2006.
He announced the setting up of the company’s first India manufacturing facility in Tamil Nadu, following completion of a memorandum of understanding (MoU) between Dell and state officials.
In the presence of Tamil Nadu Chief Minister M Karunanidhi, and Union Minister for Communications and IT, Dayanidhi Maran, the MoU was signed by Shaktikanta Das, TN Industries Secretary, on behalf of the Government of Tamil Nadu, and by Rajan Anandan, vice-president of India, Sales, Dell, on behalf of the Indian subsidiary of Dell in the presence of Paul-Henri Ferrand, vice-president of South Asia, Kip Thompson, vice-president, Global Facilities, and Simon Wong, vice-president of Asia Pacific/Japan manufacturing operations for Dell.
The project follows Dell’s disclosure earlier this year that it would establish a dedicated manufacturing operation in India, where the company is achieving strong customer acceptance and demand in a strategically important market.
In its most recent operating quarter, Dell shipments in India increased 82 per cent while revenue grew 63 per cent. The company gained two points of market share in the period, to more than 7 per cent, and ranks No 4 in the country.
Dell expects to begin India manufacturing in the first half of 2007 that will initially focus on production of desktop computers, which make up about 70 per cent of Dell’s current business in India. The new facility and related operations will be located in a 50-acre land area in Sriperumbudur Hi-Tech Park, outside of
Chennai.
"This MoU benefits both Tamil Nadu and Dell, and we’re very appreciative of the cooperation and partnership between the government and our company,” said Ferrand. "The state offers an exceptional work force and unique strategic-investment zone, along with easy proximity to a large base of current and potential Dell customers."
"This operation, in a region increasingly known for its advanced electronics hub, will give us far broader access to both India’s dollar- and rupee-based information-technology markets, and we believe more and more customers will be drawn to the advantages of direct relationships with Dell," said Anandan, who has, since assuming responsibility for local business development and sales initiatives, led Dell to the leadership position in computer shipments to very large businesses with over 1,000 employees.
Ferrand said the company’s strength and momentum with customers in India and APJ are impressive. In the second quarter of this year, Dell became the second largest provider of computer systems in the region. The company has long been No 1 in worldwide industry share.
The manufacturing plant in Tamil Nadu will join similar Dell APJ operations in Penang, Malaysia and Xiamen, China. Globally, the company also builds computer systems in Austin, Texas, Nashville, Tenn., and Winston-Salem, N.C., in the United States; in Limerick, Ireland; and in Eldorado do Sul, Brazil. A second South American production site is currently under construction in San Paulo, Brazil.
Kip Thompson said Dell would invest $ 30 in the first five years and would add another $ 30 in the next five years. It would look at providing jobs to 1,000 persons directly and to about 4,000 others indirectly.
Besides Dell's investment, there would be a number of suppliers who would set up downstream facilities in
Sriperumbudur.
Shaktikanta Das said he expected the suppliers to invest seven times of Dell's investment, going by the experience of similar projects elsewhere in the world. The Tamil Nadu government had provided a 130-acre site as Components Park which was mainly intended for suppliers to large industries like Dell and Nokia. Tamil Nadu was now a preferred destination in view of its infrastructure and talent pool.
Union Minister Dayanidhi Maran welcomed Dell to India and said he was particularly happy that Dell would set up a manufacturing facility in Chennai. Tamil Nadu was poised for rapid growth in the IT sector with more and more international companies setting up bases here. He said the climate was ideal for companies to invest in the state.
Ferrand said Tamil Nadu was preferred to other destinations in view of the infrastrctural and technical support that companies enjoyed here. What clinched the decision was the ability for suppliers downstream to be in a position to rush goods to the manufacturing facility in quick time and also enable easy exports from the Special Economic Zone here.
The desktop computers made in Chennai would be able to bring about considerable savings in costs, and Dell would make every endeavour to bring computers closer to the masses. In the first phase, Dell would concentrate on large industrial houses, and in the second phase, would look at supporting the government and education sectors, said
Anandan.
R Rangaraj
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