US computer firm Digital Equipment Corp will close its 375-employee Shenzhen manufacturing facility by March next year as part of a consolidation of worldwide capacity.
The company denied yesterday that the closure showed it had lost enthusiasm for the China market, pointing out it was signing yesterday a memorandum of understanding with the Beijing-based Founder Group Corp to explore joint-venture opportunities in the mainland personal computer market.
The Shenzhen plant, which was opened in 1988, makes video terminals and computer power supplies. It is Digital's second plant closure in this area this year - it shut and sold a 450-employee factory in Sha Tin in July.
The company said its Shenzhen staff would be ''phased out'' during the next few months, with an undisclosed financial support package based on their length of service. Digital said 70 managerial and professional staff would be offered relocation within the company.
Digital has undergone a dramatic restructuring in the past 18 months after reporting a massive quarterly loss in July last year, blaming rapid changes in technology and a shift in customer demands for its over-capacity in manufacturing.
Meanwhile, Digital Asia president Edmund Reilly said the memorandum signed with the Founder Group signalled the start of serious negotiation with the Beijing firm to establish a joint-venture manufacturing and perhaps distribution outfit in China for thecompany's personal computer products.
