In a disclosure to the Philippine Stock Exchange, SGI corporate information officer Enrique Ligeralde said their wholly-owned subsidiary Solid Laguna Corp. (SLC), based at the Laguna International Industrial Park, ceased manufacturing activities by end-2002, in effect reducing its full-year revenues by about P120 million.
He attributed the plant’s closure to the dwindling production orders from its Japanese-based clients who have instead opted to import products in completely-built units (CBUs), citing their cost advantage in view of the tariff reduction program implemented under the Asean Free Trade Agreement (AFTA), which fully takes effect this year.
"The company will, however, maintain certain technical services as well as its plastics division, which is engaged in plastic molding, primarily the manufacture of high quality plastic casings and components," Ligeralde said.
He added SLC will study its business options to maximize the use of its Laguna facilities, including disposing of certain inventories and equipment that are no longer required for any future operation.
In April 2001, SGI closed down two wholly-owned manufacturing units, Kita Corp. and Clark Plastics Manufacturing Corp., based at the Clark Economic Zone also due to the lack of production volume necesarry to sustain operations.
Kita Corp. was the local assembler of the Aiwa brand of household appliances. The decision of its principal customer, Japan’s Aiwa Co. Ltd. to restructure and suspend production orders since late 2000 had left Kita Corp. paralyzed. As a consequence, the operations of the EPS or Styropor Division of Clark Plastics was also halted since this unit manufactures and supplies components to Kita.
Controlled by the family of businesswoman Elena Lim, SGI is primarily engaged in the manufacture, distribution, and export of consumer electronic products, primarily operating production facilities for the manufacture of TV, video, and audio under the Sony, JVC and Aiwa labels.
With the shutdown of its local manufacturing units for consumer electronics, SGI will be shifting its focus to its other business arm – the Destiny Group, which is engaged in the multimedia business – cable TV, data and other businesses like high-speed Internet and leased line services, cable telephony, VSAT services, broadcast uplink and programming services.