As Asia's economies continue to tumble, Seagate is pushing ahead with plans for a major new production facility in the Philippines - only weeks after it closed a factory in Ireland.
Teh Ban Seng, Seagate's south Asia manager, revealed that the $70 million facility will come onstream in the first half of this year. The plant will focus on the production of read-write heads for its disk drive products, he said.
Following the closure of Seagate's plant in Ireland, the move is an indicator of the company's confidence in the Asia-Pacific region, despite its recent exchange rate turbulence - which forced Seagate to take a $63 million charge in the last financial quarter.
"We are affected by the currency crisis in two ways," said Teh. "First, in terms of market slowdown and the second in terms of investment."
The new 350,000-square foot facility will provide jobs for around 10,000 workers, offering a welcome boost to the Philippine economy, which has seen its currency slide by around 40 per cent in recent months. "I think the Philippines is relatively stable, and with its sound economic policies, it would be able to survive this economic turmoil," he added.
Teh revealed that 100 per cent of the plant's output would be for export within the Asian region. "The read-write heads will be shipped to Thailand, Malaysia and Singapore for integration to other sub-assembly sites such as disk drive assembly, PCBA assembly and media manufacture, which is part of our global manufacturing strategy," he added.
Seagate reported global revenues of $8.9 billion for the fiscal year ended June 1997. That sum represented a volume of 32 million disk drives. "We are still leading in terms of market share and revenue. We are going to reinforce our position as a technology leader and market share leader. We want to enhance our profitability and we want to develop our other businesses," explained Teh.
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