TECHNOLOGY, Lenovo Forms JV with COMPAL build new PC factory

Lenovo PC to keep manufacturer Lenovo sales, a joint venture with laptop manufacturer of Compal Electronics to build and operate of a new factory in China, as part of a movement formed announced Tuesday.
Lenovo and COMPAL invest to launch the new company, to build the factory a total 300 million dollars over the next 18 months. Lenovo will hold a 51 percent in the joint venture, while COMPAL will hold the remaining 49 percent.
The new plant will be built in Hefei, China and is scheduled to begin full production until the end of next year. The factory manufacture various Lenovo laptops and all-in one desktop PCs for sale all over the world.
Lenovo said the joint venture is to add the production capacity that necessary, maintained its growth: it is currently the fastest growing of the world's top five PC manufacturers.
Market research firm in the second quarter, the Chinese companies rose to IDC are the world's third largest PC maker with 12.2 percent. The company's PC-sales for the quarter rose by 22.9 percent when compared to the previous year.
Lenovo was growth so quickly, the company expects that to surpass Dell by end of this year. Dell had a 12.9%-parts market in the second quarter, and PC saw over only 2.8 percent increase in revenues last year.
But Lenovo joint venture with Taiwan's Compal Electronics actually an effort to profit margins on PC sales, said Tracy Tsai, an analyst at research firm Gartner.
Other PC manufacturer, Acer, Dell and Hewlett-Packard, have all developed, Compal to the development and manufacturing of laptop computers. Establish a joint venture with COMPAL help Lenovo would streamline the production of supply chain and lower transaction costs, said Tsai. This comes as profit margins for PC sales because of increases in labour and material are in decline, she added.
"Lenovo is definitely to consolidate its supply chain cost effective do want," said Tsai.
The joint venture will operate as a stand-alone Lenovo product provider. It will leave on company design and manufacture experience.

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