2.5 Billion Investment in Santa Rosa, Laguna

HONDA Philippines Inc. (HPI) is investing P2.5 billion for the expansion of its motorcycle manufacturing plant in Santa Rosa, Laguna, which is designed to increase yearly capacity to 600,000 units from 400,000.

HPI’s investment was announced just weeks after another Japanese motorcycle company, Suzuki Motor Corp., broke ground for its $26-million factory at Carmelray Industrial Park in Canlubang, Laguna. The new plant will more than double Suzuki’s production capacity to around 200,000 units.

HPI’s P2.46-billion project involves the construction of new buildings as well as the acquisition and installation of additional machines and equipment for the production of motorcycles, parts and components.

It will have an in-house capability to manufacture major parts and components such as engine parts, frames/chasses, fuel tanks and major plastic components for various models of motorcycles.

The expansion will entail an additional 507 employees.

The project will start commercial operations in April next year.

The project was given pioneer status by the Board of Investments due to the magnitude of the investment.

Trade Secretary Gregory Domingo, chairman of the BOI, said HPI’s expansion "will accommodate the strong demand for motorcycles in the years to come as it sustains its annual double-digit growth."

In 2010, the motorcycle market in the Philippines grew 19 percent year on year to about 760,000 units.

"Motorcycles are considered an affordable means of transport for Filipinos," Domingo said.

The new HPI plant will initially produce automatic transmission (AT) models. All models will be equipped with 110 cc automatic transmission engines mounted with linked assembly engine hangers. The models will have different body frame configurations, different headlamps and tail lights designs, and different plastic body cover shapes and stripes designs.

While other motorcycle models are provided with step bars on the left and right sides of the unit, these scooter models will have a footrest (platform) in front as an integral part of the body.

The firm will also be producing new and other non-AT models in the mid-term.

The BOI said the high-value parts of HPI’s in-house production will provide opportunity for future export to other countries with Honda plants.

It said that the company has set a minimum target of 30 percent weighted average, by parts, for localization. However, the localization program for new models will depend on the capabilities of local parts makers.

Motorcycles produced will be sold through HPI’s 825 dealers nationwide.

Suzuki’s new facility is also set to begin operations in June 2012. Suzuki put up the new plant because there is no more room for expansion at its existing plant in Pasig, which has an annual production capacity of about 85,000 units.

SOURCE:  http://www.malaya.com.ph/july20/busi1.html
IMAGE: motorcycleusa.com