Germany’s Stihl group investing P2.5B in PH plant

German manufacturing giant Stihl Group is investing P2.5 billion in a production facility in Batangas, reportedly the biggest “building investment” made by the company across its global operations to date.

The planned 60,000-square-meter facility, which will be launched on Tuesday, is expected to expand the regional manufacturing network of the Hong Kong-based Zama Corp., a subsidiary of Stihl, the German firm said in a statement issued Friday.

The plant, which will be located within the First Philippine Industrial Park in Sto. Tomas, Batangas, will produce a wide array of Zama products, including its trademark carburetor for small fuel engines. The Stihl plant is expected to start commercial operation by 2016.

“This is Zama’s biggest building investment to date and a milestone in the history of our subsidiary,” noted Bertram Kandziora, Stihl executive board chair, who will be in Manila to witness the groundbreaking ceremony for the facility.

Zama was granted pioneer status by the Philippine Economic Zone Authority (Peza), which means the company will enjoy income tax holiday for its project in the Philippines.

The Zama facility in the Philippines is expected to stimulate business activities and generate thousands of jobs in the country.

A wide array of parts and components that will be used in Zama’s production operations will be supplied by local sources in the Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) area.

Kandziora said the Philippine partnership “will be crucial in the group’s consolidation and in the fulfillment of its objective to increase its global market share.”

The Stihl subsidiary, recognized as a technology leader and the world’s largest manufacturer of diaphragm carburetors, has plants in Japan, Hong Kong, China, and the United States.

Zama has about 2,400 employees and produces more than 14 million carburetors for 350 different models.

Zama president Jan Grigor Schubert and Nikolas Stihl, chair of the advisory board of Stihl Holding AG and Co., had reportedly met with President Aquino who was recently in Europe for an official visit. The German executives discussed Stihl’s newest venture in the Philippines, which they recognized as one of the fastest growing economies in the Asia-Pacific region.

“During President Aquino’s visit in Berlin, he talked about the training program for skilled workers provided by Tesda (Technical Education and Skills Development Authority) and how investing companies like ours can cooperate with the government agency to provide vocational training to our pool of employees,” Schubert noted.

Stihl, for his part, said his group was impressed by the steps taken by the Philippine government to improve the business environment and entice investors to locate in the country.