SHIMANO Inc., a Japan-based bicycle and bicycle parts manufacturer, is investing P1.32 billion for a facility in the First Philippines Industrial Park (FPIP) and is keen on availing itself of the preferential tax treatment recently granted to the Philippines by the European Union (EU).
Shimano, through Shimano Philippines, took up a 13.03-hectare area in FPIP’s 442-hectare ecozone for its manufacturing facility, which will churn out various bicycle components mainly for the export market.
Considering the recent approval by the EU of the Philippines’s application to the Generalized System of Preferences Plus (GSP+) scheme, the Japan-based manufacturer seized the opportunity to be in a competitive position as other Asean countries do not enjoy the GSP+ treatement.
The GSP+ scheme allows for around 6,274 product lines, including bicycle parts and components, from developing countries to enter the EU, duty-free.
The Japanese manufacturer is upbeat on the prospects of its exports to the EU given the tax privilege given to exporters in the Philippines.
Quoting bicycle industry online portal Bike Europe, Shimano Inc. said bicycle export from the Philippines to the EU markets has been growing and is expected to further pick up in the coming years.
“In the first six months of 2014 it expanded by 28 percent from 338,000 units in the same period in 2013 to 433,000 this year [2014]. GSP+ will also have a very positive effect on the bicycle producers in the Philippines,” Bike Europe said.
Aside from the EU, Shimano is also eyeing a bigger share of the market in the BRICS countries (Brazil, Russia, India and China).
The P1.32-billion manufacturing facility, the first of Shimano Inc.’s in the Philippines, will be in the Lopez-led FPIP in Santo Tomas, Batangas, and eyes to employ 1,000 workers once in full operation.
Shimano is part of a growing list of locators in FPIP which include B/E Aerospace, Brother, Canon, Honda, Ibiden, Murata, Nestlé, Philip Morris and Sunpower.
Shimano now operates over 40 factories and sales offices with close to 13,000 employees in more than 20 countries. As of end-September 2014, net sales amounted to ¥241 billion, or P91 billion, while net income reached ¥34.67 billion, or P13 billion.
FPIP is a 70-30 joint venture between First Philippine Holdings Corp. , a holding company of the Lopez Group; and Sumitomo Corp., one of Japan’s biggest conglomerates.
Early this year, FPIP received government approval for its 92-hectare expansion plan, called FPIP Special Economic Zone.