German firm puts up $16-M machine parts factory in Batangas 

German machine parts manufacturer Zama group is putting up an 11,000-square meter facility in Batangas, bolstering its capacity to produce materials for small off-road engines.

The German-Philippine Chamber of Commerce and Industry, Inc. (GPCCI) said the German firm’s local unit, Zama Precision Industry Manufacturing Philippines, held a groundbreaking ceremony on Jan. 17 that launched the project which is scheduled to be operational by February 2024.

“Through this new facility, we will be able to amplify our efforts in producing electro mechanicals technologies, wire harness and textile materials, as well as explore other business ventures,” Zama Philippines president and managing director Ronald Wienholts said, as quoted by GPCCI.

“This contributes more to the economy of the Philippines and also generates more employment,” Wienholts added in the statement provided by the business group.

Zama  Group is touted as the world’s largest manufacturer of diaphragm carburetors, a major supplier of chain-lubrication solutions and tensioning kits for chainsaws.

Aside from the Philippines, the group also has production plants in Japan, Hong Kong, China and the United States.

GPCCI executive director Christopher Zimmer said Zama had been a great example of how companies from Europe were approaching diversification and exploring “China Plus One Strategy.”

“They are selecting now other investment places outside China with the (strategy),” the GPCCI official said, citing this as a way to decouple from the East Asian country, which had imposed more stringent pandemic protocols previously.

Last week, Zimmer said German firms have an optimistic outlook for this year, citing a mix of keen interest and already scheduled investments in the energy, business process outsourcing and medical sectors in 2023.

According to the November 2022 results of GPCCI’s Fall 2022 AHK World Business Outlook, 53 percent of 68 surveyed German firms in the Philippines said they were in a “better situation,” an improvement from the 47 percent in the earlier survey.

The survey also identified the biggest risks cited by these companies: 56 percent identified supply chain disruption as their highest concern.

Other risks identified by German companies were the high cost of electricity, high prices of raw materials and movements in the foreign exchange rates.