Pinoy companies — Imprinting the Philippine mark in China PDF Print E-mail
Friday, 02 September 2011 13:42

It is said that just as the 19th century belonged to England and the 20th century was the United States’ time, so does the 21st century belong to China. If this is correct, then the Philippines and Filipino companies are well-positioned in the new millennium, having established a firm foothold in the economic powerhouse that is China.

These Philippine champions bring Pinoy-style world-class corporate leadership in one of the world’s most competitive markets. Their journey and accomplishments draw attention to ways that the economic relationship between Beijing and Manila has evolved in the past three decades.

Since the 1980s, Philippine companies that have boldly ventured in the Chinese market have steadily reaped rewards. Their performance and contributions to the transforming process of the creation of wealth in China anchor the foundations for bigger and more vigorous trade and investment ties between the two neighbors.
Proudly Pinoy-owned brands

Did you know that as early as 1948, San Miguel Corporation (SMC) was already brewing beer in Hong Kong? In the 1990s, SMC acquired Chinese local brands Blue Star and Dragon, which enjoy market leadership position in Hebei province in Northern China. San Miguel also has interests in Guangdong province which borders Hongkong and Macau, and which has been since China’s opening-up, the country’s economic juggernaut in the south.

What started out as a humble ice cream parlor in 1975 is now one of the Philippines’ most well-loved consumer brands that have been confidently expanding to overseas markets. “I miss Jollibee’s sweet spaghetti,” says one OFW in China, while another laments, “Sana merong Jollibee hamburger dito sa Beijing.”

Although the Jollibee hamburger chain is only present in Shenzhen, Guangdong province, Jollibee Food Corporation is now the owner of three major food chains in China: Yong He King, a Chinese fast food service chain and Hong Zhuang Yuan, a casual dining restaurant, as well as San Pin Wang, the leading beef noodle restaurant chain in Nanning City (southern China).

The Liwayway Group of Companies, manufacturers of Oishi snack foods, first embarked on its first venture outside the Philippines with the establishment of its two factories in Shanghai, China. Since then, its operations in China have grown to 14 manufacturing bases, with one factory opened in Xinjiang province, China’s westernmost province, bordering Kazakhstan. It has also acquired Great Lakes Juices, which produces fruit drinks and concentrates. One hundred percent (100%) of the raw materials for Great Lakes Mango Juice is proudly sourced from the Philippines.

Another maker of well-loved Pinoy brands such as Jack ‘n Jill, Chiz Curls, Chippy, Maxx candies, Piattos, Cloud 9 and C2 is Universal Robina Corporation, and it boasts of manufacturing and marketing operations in China. Its Aces and Jack ‘n Jill products distributed in over 80 cities in China and its Shanghai Peggy Foods Ltd. in Shanghai makes candies, wafers, potato chips and other snack products.

Robinsons Land Corp., meanwhile, sought to make its mark in China’s real estate market when it established Ding Feng Real Estate Co. in 2003, which specializes in mixed-use developments such as condominiums, shopping malls and hotels. Present in the five cities of Shanghai, Xiamen, Chengdu, Taicang and Chongqing, Ding Feng has two malls in Xiamen and Shanghai as well as five residential condominium buildings and several in different stages of construction.

Jinjiang Sanlian Steel Company is a Philippine-invested enterprise that first opened in Fujian province in China in 1993, producing structural deform bars and wire rods. Now, its brand “Jin Yi” is widely-recognized among Fujian province’s “Top 100 Fujian Well-known Brands”. Its steel products have been used for major Fujian government public works projects like the Xiamen-Fuzhou expressway, the Xiamen-Zhangzhou Hanging Bridge, the Jinjiang International Airport, the Quanzhou International Sports Arena, the Jinjiang Water Dam, and others.

One of the more well-known banking brands in the Philippines, Metrobank, established representative offices in Shanghai in 1993 and in Beijing in 1994. To further gain headway in China’s banking services sector and strengthen financial links between the two countries, the bank established Metropolitan Bank China Ltd., a wholly owned foreign enterprise in Nanjing, Jiangsu Province. Jiangsu province neighbors Shanghai and has one of the biggest GDP outputs among Chinese provinces.
US$ 2.7-billion Philippine investments in China

According to statistics from the Chinese Ministry of Commerce (MOFCOM), from 2008 to the end of 2010, the Philippines established 130 enterprises in China, amounting to US$ 376 million. This means that over this three-year period, the Philippines established an average of about 40 enterprises a year, with an annual investment value of about US$ 100 million.

The cumulative number of Philippine investments in China to the end of 2010 is 2,736 enterprises, with an actual investment value of US$ 2.78 billion. The Philippines ranks as China’s fourth largest ASEAN investor.

In the five-month period of January to May 2011 alone, Philippine investments in China amounted to US$ 38.04 million, representing a decrease of 41.22 percent from the same period in 2010. According to MOFCOM statistics, there are a total of 19 new Philippine enterprises in China, reflecting a 46.15 percent increase from the 13 enterprises established in the same period in 2010.

Government statistics show that in 2010, Philippine invested in 40 projects in China, representing an increase of 2.56 percent. Actual investment was US$ 138 million, representing an increase of 24.37 percent

From 2008 to 2010, Philippine investments in Fujian province (including Xiamen) accounted for 51.27 percent of Filipino total actual investment in China. Its investments in Jiangsu province on the Yangtze River Delta accounted for 28.66 percent of the total for said period, while its investments in central and western China accounted for 7.93 percent of the total.

Philippine investors primarily entered the manufacturing sector (69.09 percent of total Philippine investments in China from 2008 to 2010), concentrated in traditional industries such as paper making, textile and garment, construction materials, electronic parts and components, furniture and food.

Investments in the real estate sector have increased in recent years, with actual investment accounting for 12.43 percent of the Philippines’ total investment in China in the same period.