Global computer major Dell on Thursday signed a memorandum of understanding with Tamil Nadu government to set up its first manufacturing plant to make desktop PCs in the Special Economic Zone near Sriperumbudur.

The unit would come up at a 50-acre land in the SEZ, at an investment of Rs 280 crore (Rs 2.80 billion) and is expected to attract major component vendors of Dell to set up their plants in the area as well, a company release said.

The project would provide direct employment to 1,100 people and indirect employment to over 4,000 people, it said.

Dell had evaluated various states in the country for setting up their manufacturing base and it chose Tamil Nadu due to the "proactive approach of the state government, quality of manpower, good connectivity and logistics and excellent infrastructure," it said, adding that the unit was expected to be commissioned by mid-2007.

The MoU was signed by Rajan Anandan, vice president, Dell India private limited and Shaktikanta Das, industries secretary, Tamil Nadu government in the presence of Chief Minister M Karunanidhi and Paul Henri Ferrand, vice president, sales, Asia-Pacific, Dell, and Union IT Minister Dayanidhi Maran, the release said.

Dell said that in its shipments in India increased by 82 per cent and its revenue grew by 63 per cent in the last quarter.