Epson seeks tax breaks for projector plant in Lipa City

The Philippine unit of Japan’s Seiko Epson Corp. is seeking tax breaks as a pioneering manufacturer of high-value projectors, sub-assemblies and parts, according to the Philippine Economic Zone Authority.

Epson is one of the several foreign firms expanding in the country and making their Philippine units their alternative hubs amid the strong yen and the rising labor costs, political instability and other risks in traditional manufacturing hubs outside Japan such as China and Thailand.

“(Epson’s) application has been officially accepted and is under process in this office,” Peza Director General Lilia B. de Lima said in an announcement published in the Inquirer.

Epson Precision (Philippines) Inc., the manufacturing subsidiary of Seiko Epson Corp., is seeking pioneering status “based on the newness of (its) project and technology,” De Lima said.

If approved, the project will be entitled to income tax holiday for six years, De Lima said.

In a statement sent via e-mail, Epson said the new factory would boost its 3LCD projector and inkjet printer manufacturing capacity. The company is anticipating growth in demand for projectors and printers from business and education sectors.

Epson’s 3LCD technology offers users high-detail and vivid color results, reliability and ease of use.

With the new factory (built beside an existing one in the LiMA Technology Center), the local firm is expecting its projector production capacity to hit one million units per year. The plant is also expected to increase the company’s annual inkjet printer production capacity to about 6 million units, or double last year’s level. Total investment in Epson’s new factory was estimated to reach $110 million this year.

With the new factory, Epson’s workforce is projected to grow to 8,000 people from 6,000 last year.

“Given the expectations for projector business growth, we see the Lipa factory as a lynchpin in Epson’s future growth plans. Epson is committed to shipping customer-satisfying products from our factories here in the Philippines to our customers throughout the world. At the same time, we are equally committed to contributing to the economic prosperity and people of the Philippines,” Epson president Minoru Usui said in a separate statement.

Tadaaki Hagata, COO of Epson’s imaging products operations segment, also said, “As a key site for manufacturing Epson’s bread-and-butter inkjet and projector products, Epson Precision (Philippines) will play a vital role in the growth of our company. Epson will also strive to contribute more to the friendship between the Philippines and Japan, and to the economic development of our nations.”

The new factory, built on land adjacent to an existing plant, opened in the city of Lipa in Batangas in December 2011. Construction began in October 2010 and was completed in September 2011 as scheduled. The plant is already in operation.