German, US firms bank on Philippines

Germany’s tech giant Bosch has invested into a communication center in the Philippines

Companies from Germany and the US have recently made headlines for investing in the rising Southeast Asian economy as well as buying stakes of Philippines firm over the stock market.

US-based global investment firm Capital Group Companies (CGC) has just bought 5.4 per cent of the total outstanding stock of Philippine grocery chain Puregold Price Club Inc, according to a regulatory filing by CGC.

The investment in Puregold banks on the expansive strategy of the chain. Puregold is the closest competitor of grocery giant SM Retail and currently operates 156 stores composed of 131 Puregold Hypermarkets, Supermarkets and Extras, 19 Parco Supermarkets and six S&R warehouse membership shopping clubs in Metro Manila, Luzon and the Visayas. It now also wants to expand in Mindanao as part of plans to hit its 200-outlet target by 2015.

In September 2012, CGC acquired 8.7 per cent of Philippine port operator International Container Terminal Services.

As for the Germans, Stuttgart-based investment banking firm Thomas Lloyd Group has signed a joint-venture agreement with a Philippine energy firm and committed to invest at least $50 million to develop a biomass plant in San Carlos City in Negros Occidental during a visit by German Foreign Minister Guido Westerwelle along with a 12-member delegation of prominent business executives in mid-February.

Other recent German investments include  a communication center of  Bosch, business process outsourcing centers of Henkel, Deutsche Bank, Siemens and Bayer as well as the expansion of Continental Temic’s plant in Calamba, Laguna.

Other German firms that showed interest in investments in the Philippines were Fichtner GmbH, the largest engineering and consulting company in Germany, TÜV Rheinland AG, a leading technical service provider, Rohde & Schwarz, which specialises on radio communications, solar power specialist Conergy and business software producer SAP, among others.

Fraport AG, a German transport company which operates the country’s largest airport in Frankfurt, has said it wants “a new start” in the Philippines after it had to write off $400 million in investments at the Ninoy Aquino third airport terminal due to legal problems.

Germany is the Philippines’ most important European trading partner. Trade between the Philippines and Germany reached $2 billion in 2011. Of this, electronic exports comprised 60.7 per cent, followed by electro-technology at 9.1 percent and process measuring and control at 5.9 per cent.