Acer loses $300 M in revenues due to RP-Taiwan air dispute

After being forced to shut down six of its production lines, Taiwanese-owned Acer Philippines Corp. lost up to $300 million in foregone revenues when flights were suspented between Manila and Taipei.

The leading electronics manufacturer and exporter would still surpass its 1999 performance, but according to officials of the Subic Bay Industrial Park, Acer estimated its opportunity losses to amount to between $200 million and $300 million as a direct result of the Philippines-Taiwan air agreement dispute.

According to Sean Chen, vice president of the SBDMC Inc, developer and administrator of the industrial park, Acer exported a total of $730 million worth of electronic products in 1999 and the company has already surpassed this mark by 14 percent during the first nine months of 2000 alone.

Chen revealed that Acer projects its total exports to amount to $900 million this year, but this would have been significantly higher were it not for the disruption caused by the interruption of flights between Manila and Taipei.

According to Chen, however, Acer gave no indications of leaving the Philippines and moving its business elsewhere. He said the company had even decided to proceed with the implementation of the expansion plan that had to be set aside at the height of the row.

One of the country’s top electronics manufacturers and exporters, Acer relies primarily on Eva Air flights that ferry 60 percent of its cargo from Manila to Taiwan.

The Subic Bay Metropolitan Authority (SBMA) earlier reported that the suspension of the Philippine-Taiwan air agreement forced the company to downsize its operations simply because it had been unable to export what it produces.

In a report to the Department of Trade and Industry (DTI), the SBMA explained that Acer practices the "just-in-time" production scheme, a usual practice in the computer industry where the company maintains no inventory in order for manufacturers to remain competitive. – Des Ferriols