KUALA LUMPUR--The scheme called Malaysia Direct is being pilot tested at Dell's second Malaysian plant, APCC 2 (Asia Pacific Customer Center 2) located in Prai in Penang, Peninsular Malaysia. APCC 2 is the largest Dell plant worldwide.
Dell already has an existing plant in Penang which is the heart of the company's Asia Pacific operations. The 238,000 square feet manufacturing facility opened in 1995. Malaysia is the company's core center for IT and marketing in the Asia Pacific region.
CEO Michael Dell, in Kuala Lumpur for a brief stopover Tuesday, told the media that Dell had every intention of growing its business in Asia as the region is the fastest growing marketplace for the PC industry. "Our business in Asia has continued to enjoy tremendous growth. Malaysia Direct, if succesful, will yield a tremendous increase in the activity for our local operations".
The company plans also to improve its position in Asia where it is currently the No. 6 PC maker. Dell also claims to currently hold the No. 1 spot in the Malaysian PC market. According to industry research however, the No. 1 position is held by the PC maker's competitor, Compaq.
Dell announced that Malaysian unit shipments are up 53 percent from the last quarter and the company is No. 1 in the corporate market and No. 3 in the server market, closing in on No. 2.
No layoffs in Malaysia
Meanwhile, on the issue of layoffs, Dell said despite the company's recent announcement that it would be 'ruthless' in engaging in layoffs to maintain competitiveness and control costs, Dell said that the layoff plans would have "no effect" on operations in Malaysia and reiterated that action would exclusively affect central operations in Round Rock, Texas.
As earlier reported, Dell Computer will eliminate 3,000 to 4,000 jobs during the next two quarters as the company retrenches amid tough times. The cuts, which the company said will primarily affect employees in Texas, were widely anticipated as PC sales have decimated the bottom lines of most computer manufacturers.
In February, Dell eliminated about 1,700 jobs. At the time, the company said it did not anticipate further layoffs.
Dell admitted that the increased capacity of the Malaysian plants would certainly affect factories in the US, but was quick to add that "We're a company that is determined to have the most efficient cost structure and deliver the best value for our customers. Hence, we will ramp up our capacity here as demand dictates and certainly have lots of room to grow."