US computer maker Dell yesterday announced plans to invest €200 million in Poland, including a new factory that will help it battle for market share in fast-growing central Europe.
The world's top PC maker, Dell to date had invested little in Poland, leaving it trailing competitors including Hewlett-Packard and IBM in a domestic computer market which industry analysts say grew by around a third last year.
Sean Corkery, vice-president of manufacturing at Dell's Limerick plant, will head up the group's new eastern European manufacturing facility.
The new site in Lodz, Poland's second-largest city, will operate in addition to Dell's existing manufacturing facility in Limerick.
The company says it will help reduce the delivery time on products being shipped to customers in central and eastern Europe, as well as Scandinavia, by at least two days.
The Limerick plant, which currently employs more than 400 Poles, will continue to operate as Dell's manufacturing headquarters for Europe, the Middle East and Africa (EMEA). Dell employs more than 4,500 in Ireland.
The company expects the IT sector in central Europe's former communist states to expand by 14 per cent annually in the years ahead and it said the pool of well-educated IT workers in the region's biggest state had made it the most attractive option.
"This strategic investment is about growth, improved customer experience in the form of reduced delivery times, and access to new and growing markets," said Nicky Hartery, Dell's vice-president of operations.
More than 60 people from Limerick are expected to be involved in the development of the site in Poland, where Dell already employs more than 100 people in the areas of sales, marketing and technical support.
Yesterday's announcement follows a period of speculation about the location of the new manufacturing plant, which Dell has long insisted is essential to secure the ongoing growth of its business in Europe.
While hugely successful in the US, Dell has struggled to replicate its dominance in other markets, though Ireland remains an exception.
Paul Bell, senior vice-president of Dell EMEA, said the decision to locate in Lodz had been influenced by its proximity to a large base of Dell customers and the "significant opportunity" for growth promised by the central and eastern European economies.
"This expansion is part of our ongoing investment in superior customer experience and products to extend Dell's long-term growth," said Mr Bell.
The Lodz facility, which will produce and deliver Dell's Latitude and Inspiron notebooks, will be based on the Limerick facility, but will also offer advanced IT systems, improved flow of materials and newly-designed ergonomic manufacturing cells. It is scheduled to open in autumn 2007 and will initially employ about 1,000 people.
The opening will represent an investment of about €200 million by Dell in the Polish economy and a further indirect investment of about €53 million by Dell suppliers is also anticipated.
While Dell has insisted the opening of a new manufacturing facility in Poland will not have any impact on its Irish operations, the fact that, at €677 a month, the average Polish wage is significantly below the average wage in Ireland is nonetheless causing some concern. - (Additional reporting, Reuters)
