After a decade, FedEx returning to PHL
Posted 5 years ago
(UPDATED November 6, 2019 to reflect FedEx clarification that while it is returning to the Philippines via Clark after a decade’s absence, it is not abandoning its hub in China)
WASHINGTON, D.C. – FedEx, the American multinational courier, is returning to the Philippines after a decade’s absence, this time setting up stakes in Clark Freeport, one of two major United States military bases until 1991, Manila’s top diplomat in the US said.
The logistics giant stressed in a press statement in Manila, however, that while it was returning to the Philippines, it is not abandoning its hub in China.
From Subic – the other major former US base in the Philippines — FedEx had relocated its operations to Guangzhou, China in 2009, reportedly due to the limited space in the former American naval base, which had constricted its ability to expand.
Philippine Ambassador to the US Jose Manuel Romualdez told visiting journalists here that FedEx is one of the American companies that have expressed interest in going back to the Philippines amid the US-China trade war.
FedEx made it clear, though, it will not move out of China, when it sets up stakes in Clark.
“FedEx is not relocating and has no plans to relocate its Asia Pacific Hub,” FedEx said in a statement sent to the BusinessMirror, to clarify a story published on November 6. Any implication or impression “that FedEx is relocating its Asian Hub to the Philippines and is moving out of China . . . is unequivocally incorrect,” it added.
“Our planned operations in Clark will enable us to better serve our customers in the Philippines and are part of our ongoing expansion throughout the Asia Pacific region as our business continues to grow,” it added.
In its statement on Wednesday, the global courier said, “FedEx is committed to the Asia Pacific region, including our customers and employees in both China and the Philippines, and we continue to consider opportunities and make strategic investments to expand our service, enhance our network and provide greater global connectivity.”
According to Romualdez, Bases Conversion and Development Authority (BCDA) president and chief executive officer Vivencio Dizon is set to announce the return of FedEx “but on a much bigger scale” at the Clark International Airport in Pampanga soon.
“So FedEx is going to be operating, it’s gonna be a big hub in Clark. So that is a big win for us and hopefully that would be the magnet that will make other companies start looking at the Philippines.”
The American logistics giant gained foothold in the country through the launch of the FedEx AsiaOne intra-Asia service with the opening of the Subic Bay hub in 1995.
Subic boasts of an international airport touted to have superior features, having been built for US military aircraft during the decades-long lease by Washington of the bases at Subic and Clark.
In 2005, FedEx announced that it was abandoning its Asia Pacific hub at the Subic Bay Freeport and special economic zone in Zambales. It announced the transfer to the Guangzhou Baiyun International Airport in China with a total investment of $150 million. The pullout from the Philippines was completed in June 2009.
In his talk with Filipino reporters in Washington earlier, Romualdez had said, “Now they are moving out of China. I am not sure what the reason is. but I assume it has something to do with the trade war or it is part of their strategy that they see that the Philippines is the center in Asia.” He added said US President Donald Trump has described the Philippines as “the most valuable real estate in Asia” because of its strategic location, at the center of its Asian neighbors.
“Geographically, we are the best place to be located. But really, the biggest obstacle is the economic barrier that should be seriously looked into,” Romualdez said, adding his voice to the push among some quarters to review the 60-40 equity restriction for foreign businesses in the 1987 Constitution.
Jose Victor Chan-Gonzaga, economic affairs minister at the Philippine Embassy in Washington D.C., said the interim site of the planned FedEx hub in Asia Pacific would be completed in the second quarter of 2020.
Gonzaga said the long-term and bigger site is scheduled to be operational in 2024.
Aside from FedEx, Romualdez said Cargill Inc. and Procter & Gamble have increased their investments in the country.
In November 2018, Cargill announced it was pouring $235 million to grow its business in the Philippines over the next two years. The amount will finance the expansion of its animal feed and nutrition business and agricultural supply chain businesses, and at the same time support the growth of C-Joy to deliver on increasing consumer demand for the chicken.
Reference: Business Mirror
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