Software to manufacturing

SOFTWARE TO MANUFACTURING

India is generally viewed as Asia’s software and contact center hub, while China was viewed as a manufacturing hub. Over the past year firms like Ericsson, Nokia, Motorola, LG and Samsung have announced plans to set up manufacturing facilities in India.

Now, Dell is looking at more than doubling its revenues from India to over $1 billion within a few years. They too want to join the setting up of manufacturing activity in India along with many other international companies of repute.

The world’s largest computer market, Dell will set up a manufacturing facility in India in the first part of next year. It will be the company’s fourth plant in Asia after two in China and one in Malaysia.

Dell is also looking at more than doubling its revenues from India to over $1 billion within a few years. Dell employs 12,000 people in India in contact centers, R&D facilities and sales. The company’s move to set up the facility would be yet another vote of confidence in India’s growing focus on manufacturing.

For long, India has been viewed as a software and contact centre hub in Asia, while China was viewed as a manufacturing hub. Over the past year or so, companies like Ericsson, Nokia, Motorola, LG and Samsung have announced plans to set up handset and telecom equipment manufacturing facilities in India. Dell’s entry is expected to encourage that trend.

Dell’s Asia-Pacific president said that they are finalizing the plans of setting up and more details will be clear shortly. The details of the proposed facility and the industry sources expect it to come up in the southern India near the metro city of Chennai. Other possible locations are not ruled out.

Dell sets up factories, as a rule, in areas that have lot of talent and offer good logistics. He said that over the last few years Indian market had grown and within a couple of years it would become the third largest in Asia from being at No 4 at present after Japan, China and Australia.

Dell, which sells PCs, servers and laptops, largely to enterprise and small businesses, is a $52 billion revenue company. In India Dell does business worth about $400 million, although it entered the country only a few years ago. It follows a unique strategy of selling to customers directly, mostly online, and does not depend on channel partners. This cuts out huge margins and makes its products much less expensive than competitors.

Recently there was a technical problem of Sony’s batteries exploding in Dell’s laptops. Because of this the company had proactively recalled four million batteries worldwide. Sony batteries were also recalled in India as well, but the number was small and would not affect the sales of laptops here. After the episode, Dell concluded three very big deals to sell laptops to large enterprise customers.

The suitability of India for setting up manufacturing activity by international conglomerates is identified and there is an upward trend. Most of the industrial sectors be it IT, Automobiles. Pharma or Service providing India is emerging as the leader to attract businesses in this part of South East Asia.