The world's top PC maker Dell Inc expects its second factory in China to be operational by next year, which will help double its PC output in the country.

The factory, located in Xiamen, a city in east China's Fujian Province, is being built around an existing factory.

The new facility will make China the third largest manufacturing site in the world for Dell, said Kevin Rollins, president and chief executive officer of the firm.

The second factory will mainly supply products to the Chinese market and to other North Asian countries.

According to Bill Amelio, president of Dell's Asia-Pacific Region, the factory will be operational in the first quarter of next year.

And by that time Dell's PC output in China will account for 8-10 percent of its global production, he added.

That will help Dell further flex its muscle to better compete with China's Lenovo, Founder Technology and US computer maker Hewlett-Packard (HP).

Rollins said Dell's business model has a major advantage over its rivals, such as HP and Lenovo.

"Our strategy for manufacturing is unique compared to our competitors," he said.

"We are trying to manufacture PCs very close to each market."

Other PC makers usually make PCs in China both for the Chinese market and for the global market, he said.

Localized manufacturing will help Dell strengthen its direct sales model, Rollins said. Dell became successful in the global PC industry by selling to customers directly, a unique approach from its rivals.

Dell introduced the model to China in 1998.

Its total PC output in China reached 1 million units in 2001. It has now produced a total of 10 million computers in the country.

Rollins and Amelio were in Beijing yesterday to celebrate the 10 million mark as well as the seventh anniversary of the firm's entry into the Chinese market.

China has become an integral market for Dell, said Rollins, who vowed to increase investment in the country in years to come.

Dell last year procured components worth more than US$12 billion in China, which were used in Dell's PC products sold globally, according to Rollins.

China is now the fourth largest market for Dell.

The firm held a 8.4 percent share of China's PC market in the first quarter of this year, trailing Lenovo and Founder Technology, according to data tracking firm IDC.

And Dell's PC shipment and sales in China surged 30.1 percent and 10.5 percent respectively in the first quarter.

Rollins said consolidation in the global PC market will continue after Lenovo's acquisition of IBM's PC unit and HP's restructuring.

However, "Dell will remain the same" in the years to come, he said.

Lenovo agreed to acquire IBM's loss-making PC business for US$1.75 billion last December.

HP, coping with the slowing PC business, is restructuring its global operations by cutting its workforce by as much as 10 percent.

(China Daily August 3, 2005)