Made in the Kingdom

HP claims that its Saudi-based PC assembly plant is paying early dividends in its bid to challenge white box manufacturers in the regional SMB and education sectors.

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By  Simon Duddy Published  March 11, 2004

HP has heralded early sales of PCs produced by its Saudi Arabia assembly plant, which opened four months ago. Buoyed by major government contracts HP has reported a 35% growth in desktop PC sales in this period. “The new production plant has produced 30,000 units to date and we are working closely with our Saudi national partners to ensure that we get top notch product to the customers,” said Christoph Schell, general manager, Personal Systems Group, HP Middle East. “We are confident that the PC production facility will cater to the growing SMB and education sectors across the region. It’s great to see the ‘Made in the Kingdom of Saudi Arabia’ sign on the back of these desktops.” HP says that PCs can be put together faster for the Middle East market now that the production facility is up and running. The model produced at the moment is limited to the mid-range D230, although HP has not ruled out production of other desktop products, including servers. There are no plans to produce either notebooks or high-end desktops at the plant. Schell also claimed that failure rates of PCs assembled at that plant is below targets set by HP and that PCs are being produced more cost effectively than in plants in the Far East, despite higher labour costs in Saudi. The plant employs more than 50% of its workforce from the local population, although this figure includes part time students. HP claims that customs breaks afforded by the government and increased logistically efficiency have compensated for the extra labour costs incurred. HP is the first multinational company to set up production facilities in the kingdom.

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