French exec: Infrastructure can bring investors into Cebu

THE right infrastructure will not only attract foreign investors to locate in Cebu but will also help them expand their operations to other parts of the Philippines.

Such was the case of French company Delfingen, a global automotive supplier and manufacturer of on-board networks protection solutions and fluid transfer tubing, which has two plants in the Mactan Export Zone (MEZ) 2 in Lapu-Lapu City.

“While we are driven by customers, the Peza (Philippine Economic Zone Authority) is giving the infrastructure to make business easier,” Damien Personeni, Delfingen executive vice president, told reporters during an eye care initiative with Essilor Foundation for Delfingen employees and dependents at their MEPZ 2 plant last Saturday.

Aside from the infrastructure, it also helps that the majority of the Philippine population speak English, making it more convenient for them to do business here, Personeni added.

The MEZ 2 was established through a partnership between the government and AboitizLand, a member of the Aboitiz group of companies. The private company is developing and operating the zone under the Build-Operate-Transfer scheme for the landowner, Mactan-Cebu International Airport Authority (MCIAA).

According to data from the Lapu-Lapu City government, there were 54 locators in the 63-hectare free zone as of December 2012.
The MEZ 2 is only among the hundreds of special economic zones the Peza operates across the country where locators are given fiscal and non-fiscal incentives meant to attract more foreign direct investments.

Delfingen first began operations in the Philippines through its plant in Cebu, the biggest in Asia, in 2000.

The company now has two plants at MEZ 2 with a total land area of approximately 7,000 square meters. It started out with only 40 workers 17 years ago, but has grown to employ 230 today.

Delfingen set up a plant three years ago in Cavite where they now have 60 co-workers, catering to Japanese clients.

In Cebu, the firm’s main customer is American company Learn Corporation, a global supplier of automotive seating systems and electrical systems, which has a factory in MEZ 2 as well.

Delfingen also directly exports to clients in Vietnam and Indonesia from Cebu.

“Our main interest in working here is to have very close proximity with our key customers. Our products are very bulky and the automotive industry is very demanding in terms of just-in-time delivery. We try to deliver to all our customers worldwide within 24 hours,” said Personeni.

Lear mainly serves the American and Japanese markets and as these segments grow, the more beneficial it is for Delfingen as well, Personeni said.

Asia produces 50 percent of the world’s vehicles today, further driving the growth of the French automotive solutions company in Asia.

“The Philippines has been, for many years, our flagship and has been central to our operations,” Personeni added.

French Consul Christian Hue, in a separate interview, said economic zones across all countries are always attractive to foreign investors because local governments allow foreign business to locate tax-free.

Operating without paying taxes, at least within the period specified in the incentives offered by local economic zone authorities, are welcome since operating costs are reduced and competitiveness is increased.

Hue said it would also be ideal to build more economic zones in the Philippines to attract more foreign investors to set up operations here.

Lapu-Lapu City is also home to the Mactan Export Processing Zone (MEPZ), a 120-hectare industrial estate which started out with only eight companies in 1986. After more than 20 years, it has grown to accommodate 148 locators.