Lenovo to boost production overseas as coronavirus crisis slows down China manufacturing

Che Pan, South China Morning Post

Posted at Feb 21 2020 08:31 AM

Lenovo Group, the world's largest personal computer supplier, said Thursday it would increase production overseas, as manufacturing in China slowed down because of the coronavirus outbreak.

The company's "global manufacturing footprint" including factories in Brazil, Mexico, India and the United States" will help keep Lenovo ahead of ongoing disruptions in domestic production, Chairman and CEO Yang Yuanqing said.

"We have also been working closely with our supply chain partners to ensure normal operation," Yang said in a conference call after Lenovo reported better-than-expected earnings in the December quarter.

The company's efforts reflect the current difficulties of manufacturing in China dubbed the "world's factory" for everything from clothing and cars to smartphones and toys" amid rigid government measures to contain the spread of the deadly coronavirus. Those directives included extending the Lunar New Year holiday as well as ordering companies and factories across 17 cities and provinces to cease operations until February 9.

Lenovo's manufacturing complex in Wuhan, capital of central China's Hubei province and epicenter of the coronavirus outbreak, has remained shut down, limiting the volume of smartphones and tablets the company can produce.

While the delayed return of workers to factories is a big concern, Yang said: "We are more confident about production by the end of this month."

Hong Kong-listed Lenovo, which operates in about 180 markets worldwide, reported a better-than-expected 11 percent increase in net profit to $258 million in its fiscal third quarter ended December 31. Revenue reached a record quarterly high of $14.1 billion.

Lenovo remained atop the global personal computer market with record shipments of 17.8 million units in the December quarter, finishing the year with a market share of 24.3 percent, according to research firm IDC.

Although sales in China this quarter are expected to be negatively affected by the outbreak, Yang said "demand from the rest of the world remains strong."

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