Investors still drawn to PH despite power woes

Investors are still highly keen on setting up manufacturing facilities in the Philippines despite concerns on the country’s port congestion and high electricity power rates.

Bertram Kandziora, chairman of the board of the Stihl Group, highlighted the favorable business climate in the Philippines and the invaluable assistance of government agencies in charge of providing incentives to investors, particularly the Philippine Export Zone Authority.

Kandziora said these were but some of the reasons why the German conglomerate had decided to locate in the Philippines.

“The Philippines is an attractive industrial location. It is one of the fastest growing economies in the Asia-Pacific region. It is politically stable compared to other countries in the region and has a well-structured educational system with English as an official language,” Kandziora explained.

The Stihl Group, through its manufacturing arm Zama Precision Industry Manufacturing Philippines Inc., broke ground last week for its P2.5-billion manufacturing plant at First Philippine Industrial Park (FPIP) in Sto. Tomas, Batangas.

Zama’s entry is expected to contribute to the recovery of the slip in the investment pledges. The 60,000-square meter facility is touted to be one of the German company’s biggest investments.

The facility is expected to start full commercial operations by 2016.

Zama president Jan Grigor Schubert expressed confidence that the company’s partnership with the Philippines will be for the long haul.

“After some search, we decided to place Zama’s new home here in FPIP. We had quite a number of options in the summer 2013, many of them at lower land prices. However… we have favored reliability, professional service and unsolicited support over small initial savings. I have to say that we started our mutual partnership… very well, and I am confident that we both will keep it that way,” Schubert explained.

In putting up a plant at FPIP, Zama will be in the company of the world’s biggest manufacturers who are also located at the economic zone, including the Honda Group, Nasdaq-listed SunPower Corp., Japan’s Sumitomo Corp., B/E Aerospace, Canon Business Machines, and Swiss giant Nestlé.

It will also enjoy pioneer status from the Philippine Export Zone Authority. This means the company may enjoy income tax holiday for a specified number of years and a 5-percent preferential tax rate on its gross income.

The local Zama facility is expected to stimulate business activities and generate thousands of jobs in the Southern Luzon area.