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.