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By Liu Baijia (China Daily)
Updated: 2007-11-28 10:10

Computer maker Lenovo Group will set up a plant in Poland, its fifth new facility this year, as the Beijing-based firm tries to grow its business in Europe.

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Lenovo said yesterday it would invest US$20 million to build a factory in the Legnica Special Economic Zone in Poland, which would employ 1,000 people.

It is the fifth new facility announced by the computer maker this year and the first in Europe.

"Our new plant in Poland is an example of Lenovo's world-sourcing strategy in action," said Gerry Smith, senior vice-president of Lenovo's global supply chain.

"World-sourcing strategy" refers to utilizing resources at the most suitable place and in the most appropriate way.

This year, Lenovo has announced four new facilities in Shanghai, Baddi of India, Monterrey of Mexico, and North Carolina.

The Polish factory will assemble, distribute and ship Lenovo computers for customers in Europe, the Middle East and Africa, where Lenovo's business grew by 18 percent year-on-year in the previous quarter to US$886 million - 20 percent of its total.

The facility will manufacture two million computers when it is completed in the third quarter of next year.

The company has almost 36 percent of the market share in China and about eight percent worldwide, wrestling against Acer for third position behind HP and Dell.

In the third quarter, IDC said Lenovo was No 3, with 8.2 percent of global market share, while Gartner said Acer was third with 8.1 percent of the market share, both leading the other by 0.1 of a percentage point in the two reports.

Yang Yuanqing, chairman of Lenovo, said in an earlier interview with China Daily that the integration with IBM's PC unit, which the Chinese firm bought in 2005, was complete and the goal for the next phase is to get quality growth - especially in the regions outside China and in the consumer computer market.

Europe is a key strategic market, and battleground, for Acer and Lenovo.

Lenovo tried to bid for Packard Bell, Europe's largest local computer maker, to strengthen its position on the continent, but Acer won the right to buy Gateway, which has a major position in Packard Bell.

Acer's action served both as an offense to expand its position in the region, its most important market, but also as a defense to slow Lenovo's pace.

The change prompted Lenovo to speed up its efforts on a local facility in Europe to better serve customers.