'Made in China'

There is a fusion trend in the food business where East meets West. We saw this same kind of fusion in an assembly plant we toured in Shenzen, China last week. An investment from Taiwan, this fully integrated assembly plant produces low-end to high-end digital cameras for brand names in the United States, Japan, South Korea, and Germany.

But all of these products are marked “Made in China.” In this global trading environment, Filipino marketing experts are the biggest buyers and sellers of these products all over the world.

We have seen fusion in the plant of Asia Optical Flextronics (AOF) whose sprawling complex we toured last week in Sintai, Dongguang. The AOF assembly plant is owned by one of Taiwan’s richest businessmen, Robert Lai. The AOF chairman and chief executive officer himself gave us a guided tour of his seven-story plant consisting of several buildings interconnected around the complex. He keeps a hands-on approach in running his company.

Lai disclosed that AOF produces and polishes 15 million pieces of lenses a month. Inside the plant, cameras of practically all brand names from Olympus, Canon, Pentax, Nikon, Agfa, Samsung to GE are assembled, with the lenses installed first. Aside from cameras, the lenses also go into DVD players, cell phone cameras, projectors, binoculars, telescopes, copiers, scanners, fax machines, and other office and home equipment that have them.

Lai informed us that AOF has a factory in the Philippines that manufactures binoculars and telescopes that are attached to rifles. The factory of Scopro Optical Inc. based in Mandaluyong City has 500 workers. Lai beamed with pride that his company in the Philippines supplies state-of-the-art products in demand globally for their quality and efficiency. He visits the company every year.

In Shenzen alone, the AOF employs a total of 30,000 workers although its assembly plant is fully automated. In one building in the complex alone, around 12,000 workers are employed on three eight-hour shifts. The technology and machines that AOF uses came from Japan. Lai told us the machines operate on continuous basis as they have their own power plant to ensure no disruption.

If there was one unique thing that struck me during our tour of the AOF plant was seeing all workers standing on their feet in their workstations. There are no seats in the workplaces. And talking about feet, we have to wear blue plastic cover for our shoes supposedly to prevent dust from being carried inside the plant.

Two of the biggest customers of AOF are General Electric (GE) of the US and AgfaPhoto of Germany. It was a complete surprise to me that GE that I used to know as a popular brand of light bulbs and refrigerators now also produces digital cameras. The American giant has also diversified into power generation, financial services, aircraft engines, medical imaging and television programming.

It was in 2007 when GE went into digital camera production. This I gathered from Hiroshi Seki, president and chief operating officer of Hong Kong-based General Imaging (Asia) Co., the licensed franchisee of GE digital cameras. Since they launched the digital camera line of GE, Seki said this has become the fastest growing mid-tier brand for low- and middle-income consumers. High-end GE digital cameras are affordably priced from P5,000 to P10,000.

GE digital cameras entered the Philippine market almost at the same time they were introduced in the US market in 2007. Through the marketing genius of Rene Buhay, GE digital cameras cut into the market of more popular camera brands for their affordability and innovative features that caught the fancy of consumers, including non-professional photographers. Buhay is now the president of RedDot Imaging, the official licensee of AgfaPhoto, and is currently based in the US.

In his briefing, Buhay made us understand that the penetration of digital cameras in the Philippines is a mere five percent. Cellular phones equipped with cameras, Buhay noted, have cut into the demand for digital cameras. The latest mobile phones even carry cameras with as much as 12-mega-pixel picture resolution. This is almost like using an instant camera.

Both GE and Agfa digital cameras are distributed locally by I-Digi-World, now renamed as RedDot Philippines. Joe Atick, CEO of JA Capital Holdings, RedDot’s parent company based in Miami, Florida, and Dr. Hartmut Emans joined Lai in the reception for Philippine dealers and press invited to the AOF plant tour.

“We are educating the Filipino consumer that this is a quality product that will do what it takes to do, as good as the high-end product of the top-notch brands,” Atick said. For his part, Emans shared Atick’s optimism on the Philippines as a growing market for their camera products and services.

“It will be nicely designed, upgraded products of latest technology with additional features, that everybody will be able to afford. That’s why we are here in China. We are here with the producer. And we have a producer who is capable of really doing state of the art. So we will not be behind, but we will offer state-of-the-art technology,” Emans pointed out, referring to AOF.

Buhay and Atick flew with us back in Manila last week to finalize business expansion plans in the Philippines. Buhay’s local counterpart in Manila is Dennie T. Dy, president of RedDot Philippines who along with his wife, Diane are keeping their competitors in the country on their toes.

Aside from GE digital cameras, RedDot Philippines is set to unveil early next month the new digital camera of another popular brand that they would carry as its official franchisee here in the Philippines. But they are keeping it under wraps for now till the formal launching.

Like the GE and Agfa digital cameras all stamped “Made in China,” consumers no longer frown upon such products that are manufactured through the fusion of different countries in this globalized trade and economic environment.