Author: 29042012

Japanese manufacturers move to Philippines   [Copy link] 中文

Post time 2012-12-2 23:28:50 |Display all floors
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Post time 2012-12-6 03:05:03 |Display all floors
The Philippines is the most flexible zone for manufacturers because of our cheaper yet smart and hard working labor force. Did you know that many professional Filipinos (in history) are recruited to work as I.T. specialists in Tokyo, Seoul, Middle East and yes even China?

Filipinos were once the top Air Force pilots under the USAF during the Korean and Vietnam Wars.

Filipino engineers built industrial complexes in the Middle East during the 70's and up to now since Brits or Americans could not stand the desert heat. Filipino medical specialists abound in the West.

Etc.

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Post time 2012-12-20 10:21:17 |Display all floors
Firms move some eggs out of China basket

By HIROKO NAKATA
Staff writer
Anti-Japan riots in Beijing, Shanghai and elsewhere in China in September triggered by Japan's nationalization of the disputed Senkaku Islands brought vandalism and violence to Japanese restaurants, stores and car dealers and a boycott of Japanese products.

The disturbances prompted Japanese companies to worry that they have been too dependent on China for their sales and production and thus should consider diversifying their global exposure.

The "China-plus-one" concept, in which firms look to establish footholds elsewhere in Asia, was fostered several years ago but since September has gained greater traction.

Many Japanese firms are now looking to other emerging Asian markets to spread their risks.

Following are questions and answers regarding the China-plus-one strategy, why businesses are considering it and what alternative markets they are targeting:

What is China-plus-one and what are the latest trends?

Many multinational companies have benefitted from Chinese growth over the past decade, but the boom has also sparked inflation on the mainland and, in the case of Japan, there are ever-present political and territorial strains that are cause for businesses to hedge their bets.

Japanese corporate investment started to surge around 2001 when China became a member of the World Trade Organization and opened its market to foreign investment.

Recent figures, however, indicate Japan Inc. is increasingly investing in other parts of Asia.

Amid the rise in political risks in China, direct corporate investment in the communist nation fell to ¥63.4 billion in October, down almost 30 percent from a year earlier.

In the same month, investment in member states of the Association of Southeast Asian Nations, including Thailand, Indonesia and Vietnam, more than doubled to ¥201.9 billion, according to the latest data from the Finance Ministry.

In 2011 as a whole, the data show Japan's direct investment in ASEAN reached ¥1.5 trillion, more than double the previous year's figure, while investment in China was ¥1 trillion last year, up 60 percent from ¥628.4 billion in 2010.

"If labor costs continue to rise and anti-Japan sentiment lingers in China, Japanese firms will inevitably look to ASEAN to diversify their risks," said a report by Daiwa Institute of Research issued Dec. 5.

How have Japanese firms reacted to the September riots?

In a Nov. 5 survey by Teikoku Databank, 1 out of 6 Japanese companies said they were either looking to scale down or shut down their China operations.

According to the corporate credit research firm, 54.5 percent of 10,534 responding firms said they would maintain their business, while 15.5 percent said they were considering withdrawing from China or scaling back business there.

Roughly speaking, there are three different strategies Japanese manufacturers are taking on business in China, according to the Japan External Trade Organization.

One trend has been an accelerated shift of production centers to lower-wage parts of Asia, including Vietnam and Myanmar.

Firms pursuing this generally are in labor-intensive businesses, including apparel and small "zakka" goods producers.

"In light of further increases in labor cost and difficulty in securing workers, mainly in coastal areas of China, we have been conducting surveys to find a suitable location for our new bases in inland China, Vietnam, Cambodia, Laos, Myanmar and other countries since August 2011," a JETRO report on Nov. 22 quoted one company as saying.

Another trend is the partial shift of production bases from China to ASEAN. Electronic appliance and general machinery makers plan to maintain production centers in China for Chinese consumers but transfer other output away from the country.

But for those businesses that highly value China's output networks, among them electronics appliance and auto parts makers, relocation would be difficult because their supply chains are already well-established.

"Because they have invested so much in China, it is hard for them to get out," said JETRO Chairman and CEO Hiroyuki Ishige.

It's a different story, however, for nonmanufacturers. Japanese logistics firms, food providers and retailers are looking to expand their business opportunities in the vast Chinese market, he said.

What countries are showing up on the business radar?

Thailand, Indonesia, Malaysia, Vietnam and Myanmar are popular mainly due to their low labor costs and potential consumer power.

Myanmar in particular has grabbed the spotlight in recent months as a China-plus-one site after the United States lifted economic sanctions following the landslide victory of Nobel Peace Prize laureate Aung San Suu Kyi's party in the April election.

The outcome triggered an influx of foreign investment.

"Myanmar has been uncultivated. But the lifting of U.S. economic sanctions makes it easier for other Western nations to tap the market," said Takeru Tsuzuruki of Teikoku Databank, who was in charge of a Nov. 21 report on Japanese firms' business in Myanmar.

In the report, 91 Japanese companies said as of the end of October that they were operating in Myanmar after the departure of the former ruling junta. The figure is up 75 percent from 2010, according to the report.

Besides lower labor costs and 62 million consumers, the nation's high literacy rate attracts firms because it makes it easier for workers to be trained, Tsuzuruki said.

"The location (close to other emerging Asian markets) is also attractive because it is convenient to make products there to export to other countries," he said.

Trading houses Okaya & Co. and Kanematsu Corp. as well as machinery maker Kubota Corp. are major Japanese firms doing business in Myanmar.

Recently, Juroku Bank tied up with Ayeyarwady Bank, a major private concern in Myanmar, in the first such arrangement between a Japanese regional lender and a Myanmar financial institution to help Japanese companies set up in the country.

"Although Myanmar is a member of ASEAN, it has not grown economically for many years. . . . But it draws a lot of attention as the last frontier in Asia because it has abundant natural resources such as natural gas and rare earth materials as well as an uncultivated consumer market," Teikoku Databank said in the report.

"Many companies are looking to start business, and with domestic demand remaining sluggish, we expect more Japanese firms to enter Myanmar," it said.

What about other countries?

Many firms find Thailand attractive and have already expanded businesses there as a second production hub outside China. As of the end of October 2011, 3,133 Japanese firms were active in Thailand, mainly manufacturers, including automakers and parts suppliers, according Teikoku Databank.

Many Japanese carmakers are operating already in Indonesia, whose 240 million people and high economic growth show potential. As of March 23, there were 1,266 Japanese firms operating there.

Vietnam is also gaining attention. Its low labor costs and easy access to China make it an attractive production base. As of the end of January, 1,542 Japanese firms were doing business in Vietnam, said Teikoku Databank.

But some experts caution that businesses should not rush to set up in Myanmar or Vietnam because despite their promise they also have social infrastructure shortcomings.
It is indeed very practical that the party is  judge, legislator, head of the army, executor  and  publisher  all in one in China.

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Post time 2013-1-10 18:29:19 |Display all floors
Saying that the manufacturing sector produces the “hard jobs” that could lead to decent and productive work, Labor and Employment Secretary Rosalinda Dimapilis-Baldoz yesterday welcomed as very good news the plan of Japan’s Canon Group to expand its 22-year operation in the Philippines by putting up a manufacturing facility at the First Philippine Industrial Park in Tanauan City, Batangas that, when fully operational, will employ 5,000 workers.

“I am pleased with this piece of good news,” Baldoz said to Soichiro Tabe, President of Canon Information Technologies, Inc., or ci-tech, during a 30-minute meeting at the Office of the Secretary at the DOLE in Intramuros, Manila.

“Your expansion into manufacturing is a seal of approval for the country’s economic vibrancy and attests to the resurgent investors’ confidence in the Philippines,” Baldoz said.

“It is, indeed, in the manufacturing sector where the real “hard jobs” are and it is in investors like the Canon Group that our workers pin their hopes for decent and productive employment,” she added.

Tabe, together with Rolando P. Martinez, ci-tech Vice President for General Administration and Cezar M. Gatmaytan, Jr., ci-tech Vice President for Engineering, met with Baldoz to inform her of the Canon Group’s start of operation of Canon Business Machines (Philippines), Inc. In the Tanauan City industrial zone.

According to Tabe, CBMP will manufacture laser printers, accessories, and parts of Canon cameras and other products.

Another Canon subsidiary, Canon IT Solutions (Philippines), Inc. (CITSP) will also start to operate this year for Canon’s system integration needs.

This will bring to four the Canon companies operating in the country, of which ci-tech is the longest-operating.

ci-tech, established in August 1991, is Canon Group’s largest overseas research and development subsidiary. It develops products and technologies in images, network, and communications systems, and designs, develops, and tests software and hardware. All of ci-tech’s products are for export. It has over 500 employees.

The other subsidiary, established in April 1997, is Canon Marketing (Philippines), Inc. (CMP), which is into sales and after-sales services and marketing.

Under the administration of President Benigno S. Aquino III, the country’s manufacturing industry has regained its premier position as a frontrunner in delivering the country’s economic growth and competitiveness.

In 2012, based on the Labor Force Survey, employment in the industry sector continued to expand at a rate of more than four percent since July 2011, outpacing the growth in the services and agriculture sectors. Industry share to total employment has gone up over the period 2010 to 2012, increasing from 14.9 percent (5.048 million) in July 2010 to 15.2 percent (5.710 million) in October 2012.

Employment in manufacturing, the biggest sub-sector in industry, stood at 3.003 million in July 2010. This rose to 3.130 million in October 2012, or an increase of 127,000.

“The DOLE, through its Project Jobs Fit: 2020 Vision study, has identified manufacturing as one of the Philippines’s key employment generators (KEGS). This is complemented by the Joint Foreign

Chambers’s inclusion of the same sector as one of the country’s “seven big industry winners," said Baldoz, who also bared that the National Economic Development Authority, Department of Trade and Industry, Board of Investments, and the DOLE are collaborating towards the development of a roadmap for the manufacturing industry and an industrial master plan for the Philippines, in cooperation with labor, academe, civil society and other stakeholders.

She assured the Canon Group, through Tabe, that the DOLE is ready to listen and assist investors about their concerns as they operate their businesses in the Philippines.

Tabe said the decision of Canon Group to expand further in the country was prompted by the fact that Filipino workers are among the best in the world, the country's strategic location, suitable business environment, and the Filipinos' hospitality and attitude.

"I am truly heartened by your company's decision to expand your operation in the Philippines. I assure you that industrial peace, decent work, and social protection are pillars of the country’s competitiveness in pursuit of the overarching goal enunciated by President Benigno S. Aquino III, in his 22-point labor and employment agenda, to “invest in our country’s top resource, our human resource, to make us more competitive and employable while promoting industrial peace based on social justice,” Baldoz told Tabe.
It is indeed very practical that the party is  judge, legislator, head of the army, executor  and  publisher  all in one in China.

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