Hoechst unit, five others close shop

Despite the more upbeat outlook on the economy in the wake of the change in the administration, several companies, led by a unit of a multinational chemical giant, are closing shop this year.

Six companies, led by Hoechst Pharma Production Corp., have filed dissolution papers with the Securities and Exchange Commission (SEC) for a variety of reasons. The firms have a combined authorized capital base of nearly P128 million.

The P90-million pharmaceutical unit of Hoechst has decided to stop operations after just over three years of existence. The firm said it was the decision of its Germany-based parent corporation to cease its pharma production operation in the Philippines as the reason for the company’s dissolution.

However, the SEC downplayed the impact of the closure as purely a business decision and not a consequence of the political turmoil and poor economic prospects in the country. In 1998, a string of closures, downsizing and plant transfers plagued mostly multinational pharmaceutical companies operating in the Philippines as a result of their global realignment efforts.

Other corporate casualties so far this year include Km. 18 Realty Corp. which closed due to the slump in the property sector and Eiwa Philippines, a computer hard disk maker whose principal client, Toshiba Information Equipment Inc., is upgrading and changing its line of production and will no longer require the hard disk component the company is producing.

The remaining closures are Bajaw Resources, another realty firm which has not been in operations since 1990; EAC Transport, which shut down due to the cessation of the global operations of the East Asiatic Co. (EAC) shipping business for which the corporation is a support company; and Peoples Service Specialists, in the business of operating and managing domestic services, whose key officials have left to pursue their own businesses.

The SEC said all the requirements for the dissolution of the abovenamed corporations have been complied with and no creditors will be prejudiced in the process.