Dell set to look elsewhere for second European plant


7 Apr 2005

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AUSTIN: Ireland is unlikely to be chosen as the location for a second Dell European manufacturing facility, company founder Michael Dell (pictured) has said.

The computer maker actively looking to establish a second plant on this continent but the likely destination for the operation will be central or eastern Europe, as this is thought to be better placed to serve customers located in countries close by. Such a plant would not be ready for another 18 months to two years, added Kevin Rollins, Dell CEO.

However, Dell emphasised the continuing value of his company’s manufacturing operation in Limerick. “If we were setting up in Europe for the first time, Ireland would still probably get it,” he said.

Dell denied that escalating costs in the Irish market were influencing the decision as he said that PCs are in fact less expensive to produce in Ireland than they used to be. “It’s not because of cost: now, Ireland is cheaper than it was when we started, because of [improvements in] scale, technology and productivity,” he told siliconrepublic.com.

Instead, the choice of location for the second European facility will hinge largely on geography, Dell said. “We need to be close to our customers,” he added.

According to Dell, the company’s manufacturing strategy for Europe closely mirrors that of its US operation, where Austin was the site of the company’s sole American manufacturing facility for many years. When the time came to expand its output, Dell moved outside of Texas and located a second plant in Tennessee. Since then it has also established a facility in North Carolina.

By Gordon Smith