Founder Group, China's second largest computer maker, hopes to set up regional headquarters in Scotland to enter the European market, government and company sources revealed.

If the deal is clinched, the computer giant, which sells more than 1 million computers annually, will become the first Chinese mainland company to invest in Scotland, according to Scottish Development International (SDI).

"We are facilitating such a plan, ... (and the companies) are working on investment details," Raymond Prendergast, SDI's Asia Pacific director, told China Daily.

SDI, with offices in Beijing and Shanghai, is a joint office run by Scottish Executive (the Scottish government) and Scottish Enterprise (Scotland's largest economic development agency). Its vision is to attract overseas investors and promote Scottish companies to expand overseas.

Hopefully, Founder will set up a joint venture in Glasgow on the west coast of Scotland, a city strong in logistics and information technology, according to Prendergast.

Founder's Glasgow office will focus on hardware product marketing at first and later move into research and development (R&D) to take advantage of the abundant technical resources in Scotland.

A source close to the Shanghai Municipal Foreign Economic Relations and Trade Commission revealed that Founder's regional office in Scotland, with a planned initial investment of US$3.3 million, will start operation in the second half of 2004 if the negotiation process goes smoothly. In the first year, the office is expected to bring Founder 50 to 70 million yuan (US$6 to 8.5 million) in computer sales in European markets.

Founder Group, whose computer sales headquarters is based in Shanghai, however, refused to comment on the possible project.

"So far, I have not collected any exact information about the deal," said Song Zhengying, spokesman for Founder Group.

But Song admitted that "possibly, a certain subsidiary company under the group is negotiating on the project with the Scottish party."

Long Baijin, manager of SDI's Beijing office, confirmed that a subsidiary company of Founder Group had been in close contact with a Scottish company on the project.

Founder hopes to take advantage of the Scottish office "as a springboard into the whole European market, both for its brand and original equipment manufacturing businesses," said Long.

"Hopefully, Founder's operation in Scotland will later become the company's Europe headquarters," he added.

Founder said on June 15 that its computer sales beat the industry average of 17.8 per cent, with 30 per cent year-on-year growth in the first quarter, according to the market researcher International Data Corp (IDC).

IDC data also shows that Founder became China's biggest digital camera maker early this year.

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