Ionics may relocate from RP to China

Ionics Circuits Inc., the country’s largest electronics and semi-conductor manufacturer, may be forced to abandon its manufacturing activities in the Philippines and relocate to China.

This was disclosed over the weekend by Lawrence Qua, chairman and chief executive officer of the Ionics Group of Companies.

According to Qua, the pressure to transfer Ionics’ manufacturing activities to China has been building up over the past seven years due to the relatively lower cost of doing business there and the bigger domestic market that China would provide.

"Ionics has been delaying the move to China since the Philippines has so far been efficient in its manufacturing operations and the Philippine bureaucracy has been easier to deal with," Qua explained.

However, Qua said, most of Ionics’ clients are now located in China.

Because of the current high tariff walls, it is becoming more expensive to export to China.

Relocating Ionics’ manufacturing operations in China would allow it to sell cheaper to its clients who are already in China, Qua disclosed.

Government plan, however, to extend its income tax holiday incentives from six years to a maximum of 12, could convince Ionics to stay put in the Philippines, Qua said.

But government sources said, the proposed extension of the ITH incentive may not be passed by Congress until next year.

Ionics was established by Qua in 1974.

One of its subsidiaries is Ionics EMS Inc., which provides turnkey electronic manufacturing services.

Its plants are located in the Cabuyao and Calamba, Laguna industrial belt with gross exports of over $1 billion.