Chinese mainland PC maker Lenovo Group and Taiwanese laptop OEM Compal have signed an agreement to set up a joint venture for computer manufacturing in Hefei, capital of Anhui province.

The new plant is expected to realize full load operation by the end of 2012.

On the establishment of the JV, Lenovo Group will hold a 51% stake while Compal will hold the remaining 49%. For the initial stage, the two companies will jointly invest USD100 million and an additional USD200 million investment will be put into the project in the next 18 months. According to the stake ratio of the two companies, Lenovo Group will invest USD153 million in the new JV.

The board of directors of the new JV will be formed by seven members, including four from Lenovo Group and three from Compal.

Lenovo Group said that under the leadership and operation of Compal, the new JV is expected to become a world-class manufacturer with cost advantages.

Compal is engaged in the production of laptops, screens, and TV sets for brand companies and it is listed in the Taiwan Stock Exchange.