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Friday, March 29, 2024

Japan is biggest investor in PEZA

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Japan is the single largest locator of factories in the Philippines’ industrial economic zones.

There are 867 Japanese locator enterprises in economic zones operated by the Philippine Economic Zone Authority (Peza) which is headed by Director General Lilia de Lima.   These companies have invested a total of P595.665 billion since 1995 up to September 2015. 

The 20 largest of the Japanese locators and their respective investments include:  Taganito HPAL Nickel Corp., P62.72 billion;  Toshiba Information Equipment (Philippines), Inc., P56.38 billion; Ibiden Philippines, P31.29 billion; Coral Bay Nickel Corp. P28.29 billion; Canon Business Machines, P20.59 billion; Epson Precision, P17.32 billion; Rohm Electronics, P16.39 billion; Toyota Autoparts Philippines, P12.55 billion; Tsuneishi Heavy Industries, P11.89 billion; TDK Philippines, P8.1 billion; Taiyo Yuden, P7.94 billion; Pilipinas Kao, P7.72 billion; Terumo, P7.67 billion; Nidec, P7.62 billion; Philippines Murata Land, P7.4 billion; Green Future Innovations, P6 billion; Brother Industries, P5.98 billion; Funai Electric Cebu, P5.28 billion; First Sumiden Circuits, P5.22 billion; and Nidec Precision, P4.32 billion.

Japanese locators are household names in the Philippines —Toyota, Mitsubishi, Uniqlo, Epson, Honda, Yamaha, Ajinomoto, Yakult.  Potato chips tycoon Carlos Chan has named his snacks after a Japanese word for delicious—“Oishi”.

President Benigno Aquino III recalls talking to Nidec Corp. president Shigenobu Nagamori recently.  The company is open to putting up an R and D facility in the Philippines “as long as we can develop enough engineers with masters and doctorate degrees.”

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There are four reasons why the Japanese want to locate their plants in the Philippines: one, strategic location; two, availability of cheap and skilled labor; three, generous tax perks offered by the government, and four, China has become hostile to Japanese investors, not to mention Chinese labor has become prohibitive.  There is a fifth one—Peza chief de Lima.  She guarantees no red tape and no corruption at Peza’s more than 200 economic zones.  De Lima has singlehandedly brought in more foreign investments into the Philippines than any other Filipino. For her feat, BizNewsAsia cited her for management excellence.

Epson Precision Philippines president Kazuyuki Amano finds the Philippines “simply wonderful”. “The Filipino people are very warm and very kind,” he notes. Epson first came to the Philippines in 1996, to escape the high salaries in Hong Kong. “The salaries in the Philippines are very reasonable,” notes Amano. “The Filipino workers are hardworking, efficient, responsible, and cheerful, definitely strong points,” the Epson chief enthuses. “There is not much of a problem doing business in the Philippines.” 

For its part, Murata’s largest factory is in the Philippines.  The capacitor manufacturing giant put a P1-billion facility in October 2012 at the First Philippine Industrial Park, in Tanauan, Batangas.  Today, employment is reaching 1,500.

Murata chose the Philippines for its multi-layer ceramic capacitor plant largely for the availability of a pool of skilled Filipino engineers. “Batangas produces very good engineers,” says Takashi Masuda, president of Murata Electronics Philippines, Inc.. It is also a big help that the engineers speak good English. Nearby Batangas State University is actually a technical school, producing very good professionals like engineers.

Giant Japanese laser printer maker Canon came to the Philippines primarily for three reasons—one, the generous income tax holiday or ITH (no income tax for five years); two, the easy availability of a pool of skilled workers; and three, assistance extended by the Philippine Economic Zone Authority.

Peza registered Canon Business Machines (Philippines), Inc. in January 2012 to manufacture monochrome laser beam printers. 

The company acquired a 30-hectare lot at the First Philippine Industrial Park, a special economic zone, in Santo Tomas, Batangas.  It invested approx. P9 billion in the factory which produce millions of laser beam printer per year. 

Employment has rapidly ramped up, started from less than 100 in 2012 to more than 2,300 by the end of 2014.  “We are still growing for production,” says Kazuhiko Yamada, president of Canon Business Machines Philippines. 

Says President Aquino: “The Philippines has a great number of synergies it can forge with Japan.  Japan is the largest trading partner with trade of $19.1 billion in 2014 alone.  The Philippines has entered a demographic sweet spot, which means majority of our population is of working age.  It only makes sense that we partner with countries who need more young people to work in vital sectors.”

For instance, Japan needs nurses.  The Philippines has an abundance of them, notes Aquino.  At the same time, Filipino nurses benefit from exposure to the most modern technology available in Japan.

Email: biznewsasia@gmail.com

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