Swedish furniture retailer Ikea is mulling over a plan to build a manufacturing facility in the Philippines through a joint venture with local partners.
One of the local retailers privy to the talks said the multinational company was looking not only for a big retail space but also for another site for manufacturing.
“I met with one of their representatives here. He said one of their issues is where to operate [here]. They need a large space for retail, stand-alone, which is their MO [modus operandi] in all the markets they are in,” he said.
The source said Ikea wanted to go into furniture manufacturing “but that plan has not solidified yet.”
“The furnitures that they sell [include] beds, cabinets, dressers…. They want to do it here as well. But that is dependent on their search for a partner and the corporate structure that will be forged between them,” he said.
The source said Ikea had been looking at the Philippine market for a long time now, but concerns on investment limitations dampened its initial interest.
He said the Philippines might be included in the second wave of expansion of the Swedish brand.
“We were just overtaken by other economies in the Asean. It [Ikea] is now in Malaysia and Singapore. It will be in Vietnam soon. The Philippines is positively on the second wave,” he said.
SM Investments Corp. earlier confirmed that it was one of the local firms negotiating for a partnership or joint venture with Ikea.
Ikea is a mass-based furniture and home furnishing brand that has gained popularity for its affordable and stylish products.