Shimano Factory in Batangas

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shimano factory in batangasBicycle and bike parts icon Shimano Inc. has opened a Philippine manufacturing facility in the First Philippine Industrial Park (FPIP) in Santo Tomas, Batangas, Philippines.

The establishment of Shimano’s production operation in the Philippines came just weeks after the European Parliament voted in favor of the European Commission’s proposal to include the Philippines in the EU’s Generalized System of Preferences Plus (GSP+) program. Developing countries that enjoy a GSP status enjoy lower export duties.

Shimano, through Shimano Philippines Inc., allocated ¥3.5 billion (about P1.32 billion) to build its facility within a 13.03-hectare area in FPIP’s 442-hectare economic zone. The Shimano Philippines facility, the Japanese firm’s first in the country, will manufacture various bicycle components mainly for the export market. Once in full operation, the facility will employ 1,000 workers.

Shimano Philippines formally inaugurated its factory on Jan. 9, 2015 – just weeks after the GSP+ status of the Philippines took effect Dec. 25, 2014 following the European Parliament’s favorable vote. “The GSP+ status will present the “Made in the Philippines” products a competitive edge,” Bike Europe said.

Bike Europe explained that the Philippines already benefits from the standard GSP scheme. In the standard GSP scheme, exports from the Philippines to the EU are taxed at 10.5 percent, versus 14 percent for those from countries not included in the regime.

“In recent years bicycle export from the Philippines to the EU markets was already growing rapidly. 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]. GPS+ will also have a very positive effect on the bicycle producers in the Philippines,” Bike Europe pointed out.

Aside from the EU, Shimano is also eyeing a bigger share of the market in the BRICS countries (Brazil, Russia, India and China). “The Japanese bicycle component market leader says it eyes the growth in demand from the BRICS countries, where the rising living standards results in greater disposable income. According to Shimano these markets are ripe for entry-level components for sports bicycles,” the website added.

Established in 1921 in Sakai City, Osaka, Japan, Shimano now operates over 40 factories and sales offices with close to 13,000 employees in more than 20 countries. As of Sept. 30, 2014, its net sales amounted to ¥241 billion (about P91 billion), while net income reached ¥34.67 billion (P3 billion).