This week, Colliers Research provides insights on seven German firms seeking local partners in the cold chain industry; and Nidec, a Japanese manufacturer, investing a further PHP40 billion in the Philippines to complement its current portfolio of 3.5 hectares of production space in Subic and Laguna.
German firms seek partners in cold chain industry
Seven German companies are seeking local partners in the cold chain industry. In a statement, the German-Philippine Chamber of Commerce and Industry (GPCCI) said the seven firms are C4CONSULT Effizienz-Netzwerk, Eeaser GmbH, INDYON GmbH, Ingenieurbüro Meyer-Olbersleben, Hörmann Beijing Trading Co. Ltd., MIG mbH, Material Innovative Gesselschaft, and SolarNext AG. The firms participated in GPCCI’s virtual conference, which aimed to promote energy-efficient technologies and assist German companies that intend to form partnerships in the Philippines. Earlier, the Cold Chain Association of the Philippines (CCAP) said the local industry is projected to grow by 8% to 10% annually over the next five years.
The Board of Investments (BOI) projects the revenue of the Philippines’ cold chain industry to reach PHP20 billion (USD384 million) by 2023. According to CCAP, among the factors that will likely drive demand for cold storage include consumer preference shifting to frozen food products, population growth, economic recovery, and the uptick in e-commerce. BOI aims to increase cold storage capacity by 10% to 15% annually or 50,000 pallets each year. The current capacity of the sector is at 500,000 pallets. Colliers recommends that developers take advantage of the upcoming supply in the Cavite–Laguna–Batangas (CALABA) industrial corridor. From 2022 to 2024, we expect the delivery of about 85 hectares of new industrial space in CALABA. Developers should also look into other feasible locations such as New Clark City and Taguig as they are likely to be developed by the government as agro-industrial zones.
Japanese motor maker infuses P40B more into PH operations
Nidec, a Japanese manufacturer of hard disk drives, automobiles, and consumer and industrial equipment, will invest PHP40 billion (USD769 million) in the Philippines. The firm will break ground for a 3,250-square-meter (35,000 square feet) facility in Q3 2022. This will complement their current portfolio of 3.5 hectares of production space in Subic and Laguna, and should generate 400 jobs. Nidec was initially manufacturing spindle motors and related products but has since expanded its production to products used in aerospace, robotics, and solar tracking activities.
The manufacturing sector continues to be the biggest recipient of foreign direct investments (FDIs) in the Philippines. Data from Philippine Statistics Authority show that in Q1 2022, manufacturing investments reached PHP5.2 billion (USD99 million) or about 57% of the total approved investments during the period. In our view, these investments should support industrial space absorption in the country. Colliers recommends that industrial park developers closely monitor the profile of incoming manufacturers and investors planning to expand in the country. Some firms investing in the country include electronics companies Amkor, Murata, and Samsung. The Philippine Economic Zone Authority (PEZA) also held meetings with Taiwanese electronics manufacturers and Pakistani pharmaceutical firms that are eyeing ecozones in Cavite, Bulacan, and Bataan. Developers should also be proactive in assessing and modernizing their industrial and warehouse space to fit to the requirements of potential locators.