Dell dismisses reports on plan to close or sell manufacturing plants

PUBLISHED : Thursday, 23 October, 2008, 12:00am
UPDATED : Thursday, 23 October, 2008, 12:00am

Dell, the world's second-largest personal computer supplier, has not made any decision to close or sell its plants to cut costs, its founder and chief executive Michael Dell says.

Mr Dell dismissed media reports on his company's factory closures as 'rumours'.

'We haven't announced or made any decision that would lead anyone to believe that we're doing anything different in our manufacturing strategy,' he said yesterday.

Dell, the third-biggest computer vendor on the mainland, operates two manufacturing plants in Xiamen. It also owns factories in the United States, Ireland, India, Brazil, Malaysia and Poland.

'We haven't made a decision. We certainly are evaluating our infrastructure on an ongoing basis,' Mr Dell said.

He added that it was common for company vendors to use contract manufacturers, a strategy his firm would continue.

It had been reported that Dell planned to sell most of its plants over the next 18 months to select contract manufacturers and close the rest.

Last year, Dell bought about US$18 billion in technology components and related products and services from suppliers on the mainland. It expected that amount to reach US$23 billion this year.

Research firm International Data Corp (IDC) said Dell, feeling the pinch of an economic downturn, suffered a disappointing third-quarter performance in all regions around the world except Asia-Pacific outside Japan, where it grew 33.7 per cent year on year.

Bryan Ma, the director of personal systems research for IDC Asia-Pacific, said he expected Dell to continue competing aggressively on the mainland and other emerging markets in Asia against Hewlett-Packard, the world's top computer supplier.