HP to open second India plant

Hewlett-Packard is setting up a second computer manufacturing facility in India to help it meet surging demand in the country.

The facility, in Pantnagar in the north-eastern state of Uttaranchal, will be able to churn out 300,000 computers per month when it starts operations in March next year.

It will manufacture HP’s desktop PCs, notebook PCs, workstations, and servers, and provide employment directly or indirectly to about 1,000 staff when it’s fully operational, HP said on Wednesday. It’s being set up with an investment of about $20 million.

HP, of Palo Alto, California, has had a facility in Bangalore in south India since 1999, from which it produces about 1 million computers each year.

“We had run out of capacity in Bangalore and the choice was between expanding in Bangalore or setting up a facility elsewhere,” said Ravi Swaminathan, vice president of the Personal Systems Group at HP India.

Having a facility in Uttaranchal will enable HP to service customers quickly and more cost-effectively in the north and north-east, where the market is booming for HP, according to Swaminathan. The company is also getting tax incentives from the local state government of Uttaranchal, he added.

HP rival Dell announced last month that it had picked Chennai, the capital of Tamil Nadu in southern India, as the location for its first PC manufacturing plant in the country. Dell’s facility will make 400,000 units a year when it gets operational in the first half of next year, the Round Rock, Texas, computer maker said.

Both the Dell and HP plants will serve primarily domestic demand. Sales of PCs in India were over 4.6 million in the year to March, according to research firm IDC India.

HP leads in the Indian PC market, mainly on strong sales of its notebook computers, according to IDC. It had PC market share of 20 percent in the second quarter of this year, followed by an Indian vendor, HCL Infosystems, which had a 14 percent, and Lenovo Group with 10 percent, IDC said.