Japanese Conglomerate To Set Up New Firm In RP
Manila, Philippines - March 09, 2009
JAPANESE CONGLOMERATE Sumitomo Corp. plans to open another electronics and semiconductor plant in the Philippines even as the slumping global economy forces other multinationals to leave and lay off workers.
Sumitomo, which has interests in a wide array of industries including banking and finance, construction, and mining, has received regulatory approval to incorporate Sumitomo Philippines.
Documents from the Securities and Exchange Commission (SEC) show the firm will assemble, develop, and supply raw materials and semi-finished goods for the manufacture and assembly of electronics and semiconductor products.
The goods are intended to be sold to companies located in zones controlled by the Philippines Economic Zone Authority (PEZA), Clark Development Corp., Subic Bay Metropolitan Authority, and the Board of Investments.
Sumitomo Philippines will also engage in storage and deposit inventory management of semi-finished goods for subsequent sale to PEZA-registered export enterprises.
The SEC documents state the company has capital stock of 518,452 shares worth P1,000 each, of which a quarter is owned by Singapore-based Sumitomo Corporation Asia Pte. Ltd., which manages the group’s ventures in the region.
Sumitomo Corp. lists on its website two local electronics subsidiaries, First Sumiden Circuits, Inc. International, and Electric Wires Phils. Corp., which makes and sells printed circuits and electric wires for automobiles, respectively.
The conglomerate, which is listed on the Tokyo Stock Exchange, also owns a mining company here.
Asked to comment, Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) Chairman Arthur J. Young, Jr. said Sumitomo’s plan was good news for the industry, which has been reeling from plunging demand for gadgets worldwide and inability of companies to secure loans for their businesses.
"Once the global credit crisis eases, the demand for our industry’s product will be strong again. Now is the time to encourage more investments here because the Philippines is a good manufacturing hub for Japanese electronics companies," he said.
Mr. Young also pointed out that recent approval of a bilateral trade deal between Japan and the Philippines would only make the country more attractive to Japanese investors.
Last month, industry analyst XMG said the semiconductor sector could shed up to 10,000 jobs in the first half due to anemic demand for electronics products worldwide.
In the last two months, technology firms Amkor Technologies, Intel, and Texas Instruments have cut a combined 3,700 workers.
Outbound sales of electronic products in 2008 eased by 8.31% to $28.5 billion from $31.09 billion in 2007, but the SEIPI expects a recovery by the second quarter.
by Don Gil K. Carreon
for BusinessWorld
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