Powering the Expansion

For the Philippine economy to grow at the 7-8% clip, it needs to continue to attract investments in manufacturing, preferably in sunrise industries. The BPO engine, while significant, won't always be able to pull the wagon.

Here's one kind of industry -- manufacturing solar cells -- that the Philippines would do well to create a cluster around. The interesting portion of the article is the last line -- that as big-scale manufacturers discover the Philippines as a production site , they also discover it as a BPO destination.

Greg Reichow, SunPower Philippines Manufacturing Ltd plant manager, said in the report that the U.S.-based company's expansion was underway, with the first phase scheduled to be completed by Q3 of this year. He said that the capacity of the SunPower plant in the country would be increased from 110mW to 400mW worth of solar cells within the year, and that workforce will also increase from 1,400 to 3,400 by 2008.
The company's production plant in the Philippines serves as its "hub of high-tech manufacturing," with the solar cells produced in the facility exported to the U.S., Europe and Japan. Reichow said that the new plant will produce solar cells for the export market but may also produce for local market if there will be enough domestic demand.
The SunPower official explained that the company chose the archipelago as location
for its plant because of the investment climate and available workforce. He said that the country has a strong engineering industry infrastructure, manufacturing 20 percent of the world's semiconductors. Another factor is having a low-cost but highly educated labor pool. According to Reichow, most SunPower employees in the country are engineers or other degree-holders that is why the company hired Filipinos not only for its plant but also for its back-office functions and R&D.

Philippine-centered backroom operations for multinationals, called "captives" in the preferred jargon of the industry, arleady include such names as oil companies Chevron Texaco and Shell; financial heavyweights AIG, Citibank, Deutsche Bank, HSBC, Henkel and Manulife; techies AOL, Dell and Hewlett Packard; plus other biggies such as Proctor & Gamble, Fluor Daniel, and Watson Wyatt.