Against global grands: Local manufacturing industry struggling

CEBU, Philippines - While the Philippines is trying its best to bring back the manufacturing sector to life, local business leaders are asking for a more competitive business environment, specifically for the local manufacturing sector.

"It is still expensive to do manufacturing here, " said Philippine Retailers Association (PRA-Cebu Chapter) president Robert Go emphasizing that local  fashion and apparel brands for instance are slowly swallowed by the international names that are now coming in to the Philippines.

Problems like labor cost, expensive taxes for machinery importation, high power rates, as well as uncompetitive logistics charges, among others are just few of the concerns that local manufacturers facing right now, in the face of borderless economy, Go said.

Go, who is also a former president of the Cebu Chamber of Commerce and Industry said unless the government will craft a special program that will make local manufacturers thrive amid the obvious and difficult competition with global and big players, some players in the local manufacturing sector may succumb to natural death in this kind of business.

In other countries like Vietnam, local manufacturing sector is partly subsidized by the government, thus making their products more competitive despite the entry of globally branded products.

In a report, retail sales of Filipino fashion brands have dropped by 50 percent in the first quarter this year as big foreign brands with their unlimited resources dominate the domestic fashion sector.

Retail industry leader Samie Lim bared that local fashion retailers have failed to match the resources of the huge foreign brands which now occupy premium locations and big spaces in the country's premier shopping centers.

Already, local business groups – Philippine Chamber of Commerce and Industry, Philippine Franchise Association and Philippine Retailers Association -- are discussing on strategies to help local retailers.

On the other hand, Golden ABC Inc., president Bernie Liu admitted earlier that the local brands are slightly affected by the influx of foreign and established brands in the Philippine market, competing closely with the local brands in terms of quality and prices, but told local players to fight.

Liu, whose company owns several apparel brands, such as Penshoppe, For Me, Regatta, Memo, Oxygen, and the high-end brand Tyler, said that Filipinos should take advantage of the emerging Asian market, and get ahead of the competition in its home ground.

“We are now in the middle of the new emerging market—Asia. It is good for the businessmen to take advantage of this opportunity,” said Liu.

He said the market now, has evolved, that they (consumers) are more aware of the trends, global standards, apparel fashion, with careful attention on prices.

With so many options now flooded in the market, local brands in the apparel sector can survive, it can even conquer the global market, if proper system of branding campaign, and product quality will be seriously implemented, Liu said.

As early as now, he said retailers in general should brace themselves of the entry of more foreign brands, to Asia, and including already the Philippines. (FREEMAN)