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Dell to spend $115 million on new plant

North Carolina facility will open in fall 2005 and employ 1,500 people within the next five years, Dell says.

John G. Spooner Staff Writer, CNET News.com
John Spooner
covers the PC market, chips and automotive technology.
John G. Spooner
3 min read
Dell is setting up shop in North Carolina.

As expected, the Round Rock, Texas, company on Tuesday announced plans to build a PC manufacturing plant in North Carolina's Triad region, the area that includes Greensboro, High Point and Winston-Salem. Dell will invest $115 million in the plant during the next five to 10 years, a company representative said.

The facility, which will turn out desktop PCs for consumers and businesses on the East Coast, will open in the fall of 2005 and employ about 700 workers in its first year of operation. Its head count will increase to 1,500 employees within five years, Dell said in a statement.

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Dell expects to make about $60 million in capital investments in North Carolina during its first year there, a company representative said. That figure will rise over a period of five to 10 years to the $115 million ultimately projected.

North Carolina will provide Dell with up to $225 million in tax credits over 15 years, Gov. Mike Easley's office said in a statement. The company will also receive a job development incentive grant, worth up to $14.1 million over 12 years, according to the statement.

The North Carolina factory will become Dell's third U.S. manufacturing site. The company has a plant in Lebanon, Tenn., where it assembles desktop PCs, servers and storage systems, and one in Round Rock, near its headquarters, where it builds desktops.

The PC maker, whose market share has grown significantly this year, isn't only planning to expand its U.S. manufacturing, however. The company also sees the need to build plants close to customers in Europe and Asia to support its push to gain market share, Kevin Rollins, Dell's CEO, said in a recent interview with CNET News.com.

Over the "next few years," Rollins said, "we are going to need new capacity in Europe and Asia."

Indeed, Dell has set an ambitious goal of reaching $60 billion or more in annual revenue. To hit that mark, the company has said it will have to increase its share of the PC market to nearly 30 percent. Those gains would require the higher manufacturing output provided by the new plants.

Although Dell has not yet selected the exact site in North Carolina where the plant will be built, the targeted region is in the middle of the East Coast, an ideal location for the company, which aims to position its new plants close to customers to help keep logistical costs low. Dell is still evaluating numerous sites in the Triad area, a company representative said.

"The education system, commitment to businesses and proximity to a large, and growing base of Dell customers were important in our decision to expand into North Carolina," Rollins said in a statement Tuesday.

Dell also has manufacturing facilities in Limerick, Ireland; Xiamen, China; Eldorado do Sul, Brazil; and Penang, Malaysia, where the company manufactures its notebook PCs.

The North Carolina plant will be the third facility Dell has announced this year in the United States. It has also has announced plans to add a customer support center in Oklahoma and a distribution center in Ohio.