Lenovo to start PC production in US next year

Company to start producing its Think range of notebooks, desktops and tablets at new facility

PUBLISHED : Wednesday, 03 October, 2012, 12:00am
UPDATED : Wednesday, 03 October, 2012, 10:36am

Lenovo, the world's second-biggest supplier of personal computers, will start a production line for its Think brand notebooks, desktops and media tablet in the US next year.

The Hong Kong-listed company's first United States manufacturing operation will be in Guilford county in North Carolina, where it built a US$10 million fulfilment centre in 2008 to process orders in the country. The addition of a production line would cost US$2 million, according to a report yesterday in North Carolina's The News and Observer newspaper.

David Schmoock, the president of Lenovo's North America operations, told the paper that the initiative "reflects our confidence in the US PC market". He said Lenovo did not receive state or local incentives for the expansion.

Market research firm IDC said Lenovo was the fourth-ranked personal computer brand in the US in the second quarter of this year, with a market share of 8 per cent. It ranked behind leader Hewlett-Packard (HP), Dell and Apple.

Lenovo has described the US manufacturing operation as "the latest investment in Lenovo's aggressive strategy to expand its in-house manufacturing capabilities around the world".

A statement from the office of North Carolina governor Beverly Perdue said Lenovo was expected to create 115 jobs for the proposed production line.

The computer maker is expected to make a formal announcement of its US manufacturing plan today.

Its 200,000 square foot North Carolina facility employs a staff of 160.

Lenovo, which acquired the PC division of International Business Machines in 2005, has about 26,000 employees based in more than 60 countries. It does business in more than 160 markets worldwide.

The US production initiative will mark the latest strategic expansion effort in the Americas for Lenovo, which has corporate headquarters in Beijing and in Morrisville, North Carolina.

Last month, Lenovo announced its acquisition of Comercio de Componentes Electronicos (CCE), a personal computer and consumer electronics manufacturer in Brazil, for 300 million Brazilian reals (HK$1.15 billion) in cash and stock. The deal is expected to be finalised in the first quarter of next year.

"This move more than doubles our PC market share in Brazil, one of the world's fastest-growing and most important technology markets," Lenovo chairman and chief executive Yang Yuanqing said last month.

Bernstein Research senior analyst Alberto Moel said the CCE acquisition would push Lenovo's market share to No3 in Brazil, behind Positivo Informatica and HP.

Lenovo said its present business plan in Brazil did not anticipate any workforce restructurings as a result of the acquisition. CCE, which runs three business divisions, has about 5,900 employees.

The company also announced last month the acquisition of Stoneware, a US firm that specialises in cloud computing software and services. It employs 67 staff in Utah and Indiana.