HK firm defers $50-M investment in Phl

MANILA, Philippines - The $50-million denim plant investment of Hong Kong-based garment firm Luen Thai Holdings Inc. has been temprorarily put on hold because it is evident that the US Congress can no longer pass the Save the Industries Act this session.

In a press conference, Luen Thai vice president for government affairs Maritess Agoncillo said that the promised investment of Luen Thai to President Aquino will definitely stay in the Philippines and will not be transferred to Bangladesh or Cambodia.

This is the first time that Luen Thai will be entering the denim market.

Agoncillio said that they are not giving up on the lame duck session but with only one and a half weeks to go, she said that the prospects are not very bright. This is because the US Congress is prioritizing the tax bill.

Meanwhile, Luen Thai is pushing through with its plan to expand its Adidas Sportswear plant in Mactan. Currently, the plant has 3,500 workers. the number of workers will double to 7,200 by 2011 and will eventually reach 9,000 in 2013.

The Coach handbags plant, on the other hand, will be operational next year. Luen Thai is investing P132 million in the country for the handbag plant.

 Board of Investments (BOI) executive director Lucita P. Reyes announced that the Luen Thai chief executive will be building a Coach bag manufacturing plant in Concepcion Tarlac.

Reyes said they expect commercial operations to begin second quarter next year. The new plant will hire 2,000 employees. Initially, the production will be limited to bags and wallets but Reyes said it is possible that Coach will also make shoes here.

 “This is part of their expansion because the demand for Coach bags has been increasing,” Reyes said. Coach bags are currently being produced in China. Reyes said they will not be closing their China operations.

The Save Act Bill, the bill touted to save the ailing Philippine garment industry, is now filed in both Houses of US Congress. The Save Act (HR 3039) was introduced by Congressman Jim McDermott and Congressman Brian P. Bilbray in June 2009 which had a total of 10 sponsors   A companion bill S. 3170 was introduced by Senators Kit Bond and Daniel Inouye.