On Aug 12, 2013, Brother Industries (Philippines), Inc. opened its spanking ink jet cartridge factory at the First Philippine Industrial Park in Batangas, 60 kms south of Manila.

Top officials of the land attended the inaugural, led by President Benigno Simeon Aquino III, Trade Industry Secretary Gregory L. Domingo, Director General Lilia B. De Lima, of the Philippine Economic Zone Authority, and then Japanese Ambassador to the Philippines Toshinao Urabe.

Toshikazu Koike, representative director and president of Brother Industries Ltd. and Yuji Miwa, executive officer of Brother Industries, Ltd., flew in from Japan to attend the inauguration.

Brother Industries (Philippines), Inc. President Toshio Ito and Brother Industries, Ltd. of Japan President Koike played hosts.

Sprawled on a 13.4-hectare property, the factory meant an investment of P5.77 Billion. It now employs more than 3,000. This will be increased to 3, 500 eventually. Exports have exploded, from $4.922 million in 2013 to $60.77 million in 2014.

The Batangas plant is key to Brother Industries’ rationalization of its Asian manufacturing operations. It is the second largest single factory of Brother in Asia, after that of Vientam. Previously, China was an anchor of the Japanese giant printer machine marker’s manufacturing.

But the company ran into problems not of its own making. China labor costs doubled in five years. Pollution became severe. An anti-Japanese sentiment erupted following Beijing’s and Tokyo’s dispute over the Senkaku islands.    

Brother Industries decided to look for a new plant location. It looked into Indonesia, Thailand, Myanmar and Cambodia. Thailand and Indonesia have high labor costs. Myanmar and Cambodia have no adequate infrastructure and parts supply setup. Brother decided on the Philippines.

Brother found a ready pool of young and English-speaking Filipino workers. “Young means we are assured of a steady supply of workers for the future. English means we can communicate directly with them,” explains Toshio Ito, president of Brother Industries (Philippines), Ltd.. In China, where Brother has three factories, “it is very difficult to communicate directly with the workers. Only one in 16 can speak English.”

Also, the Philippine market is booming. Brother has introduced what is calls super high-yield printers which can print 2, 4000 pages in one cartridge. The standard is 1,000 pages. ‘’The consumer gets lower cost per page,” reckons Ito.

Brother Industries said that “although the manufacturing facility in China has previously played a main role in operation of the Brother Group’s inkjet business, the new facilities in Philippines also start the inkjet business operations. The Brother Group will enhance and optimize production capabilities as well as aim to increase its global market share.

Still, Brother has found to its dismay that problems are many in the Philippines. Ito enumerates some of them, smiling: inadequate infra or roads, no railroad, port congestion, high cost electricity, access to airport.

The truck ban by Manila “was a big, big problem,” says Ito. “We cannot import parts from other countries. We had two or three weeks delay.”

“On the other hand, shipping out also suffered two to three weeks delay. We found it difficult to meet our sales target.” Brother had to stockpile parts at level higher than normal. Clients had to be warned of delivery delays. 

Source: BizNews Asia / May 11 - 18, 2015