Lenovo to build PC plant in southwest Poland

Facing stiff competition from Acer, Lenovo is aiming to grow European business with a US$20-million manufacturing facility in Poland

Lenovo will build a US$20-million factory in Poland that will churn out PCs for sale in Europe and Africa, stepping up efforts to bring its manufacturing operations closer to customers around the world, the company said Tuesday.

The 30,000-square-meter plant will be built in the Legnica Special Economic Zone in southwest Poland. Lenovo expects production at the plant to start during late 2008, with an initial capacity of two million desktop PCs per year. The factory will employ 1,000 workers, it said.

The Polish factory is the latest in a string of new manufacturing plants being built by Lenovo. This year alone, the company has announced plans to set up factories in Monterey, Mexico, and Baddi, India, in addition to a new fulfillment center in North Carolina. The company is spending $20 million on the Mexican plant and $10 million on the one in India.

When Lenovo announced the new plants in Mexico and India during July, officials said the company wanted to set one up in Europe as well. Tuesday’s announcement fulfills that goal.

Lenovo has been retooling its product supply chain in an effort to expand PC sales outside its home market, China. The company hopes that establishing factories closer to customers in major markets will allow it to respond more quickly to customer demand and stave off stiffer competition from rivals like Acer and Dell.

The rivalry between Lenovo and Acer, which is set to overtake its Chinese rival as the third-largest PC vendor this year, has been particularly strong in Europe. The two companies had both been in discussions to acquire European maker Packard Bell. Lenovo looked ready to close the deal, but an Acer deal to acquire Gateway — which had the right of first refusal for any acquisition bid for Packard Bell — stymied Lenovo’s plans.

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