The Legend Group (Lenovo), China's largest PC maker, yesterday launched a new technology and production centre in Shanghai, its third in the country.

The new centre adds to the group's centres in Beijing and Guangdong Province. It is located in the Zhangjiang High-tech Park in Shanghai's Pudong New Area.

Yang Yuanqing, president and chief executive of the Hong Kong-listed company, said: "Much-enhanced investment in research and development will become Lenovo's major powerhouse to outperform other rivals in the market.''

With initial investment of 60 million yuan (US$7.4 million), the centre will head Lenovo's development in the notebook computers and mobile telecommunications businesses.

The new production base will have a total staff of 450. It will also be one of the group's major manufacturing bases and be used to produce 1.5 million desktop computers and 360,000 laptops, which are expected to generate more than 10 billion yuan (US$1.2 billion) in annual revenue.

For the 2002 financial year that ended on March 31, the Legend Group posted net profits from its information technology-related business sales of HK$1.04 billion yuan (US$133.5 million). Driven by a turnaround from a chilly winter for the Chinese IT market, this represented a year-on-year increase of 21.1 per cent.

The company also reported that its revenue in 2002 jumped 5 per cent year-on-year to HK$20.23 billion (US$2.59 billion).

The debut of the group's development facilities in Shanghai is also a strategic move by Lenovo to reorganize its business units nationwide to enhance its presence in major hub cities following the transfer of its laptop business headquarters from Beijing to Pudong last year.

The Shanghai centre will work with the firm's other two production bases in Beijing and Huiyang in South China's Guangdong Province to produce about 5 million Lenovo-brand PCs each year.

Lenovo also launched its national half-year-long Lenovo Tech Show 2003 yesterday in Shanghai. The show aims to promote awareness of the company's long-planned PIPES-enabled application and interoperability between different IT and electronic terminals for home and office use. The show will later branch out to more than 30 other major cities in China.

PIPES stands for "proactive, integrated, proper, effective and seamless''. The PIPES system was launched late last year to guide the firm's business development in the coming five to 10 years.

In the middle of this month, Lenovo was one of the five big companies that, under the guidance of the Ministry of Information Industry, established an alliance called an intelligent group for resource sharing to promote interoperability between different terminals in the IT, household electronics and telecommunications domains. The other companies involved are the Great Wall Computer Co, Hisense, Konka and TCL.

After suffering from a global business downturn in the late 1990s, Lenovo vowed to restructure its traditional business model and shape itself into a technology-orientated high-tech company that could fully compete with international rivals, such as Hewlett-Packard and IBM.

However, Lenovo and other Chinese companies are still at a very early stage when it comes to funding their research facilities compared with foreign rivals.

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