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Wednesday, March 24, 2004
Loalde outsources production to China
A LOCAL company in Cebu is now outsourcing the manufacturing of its products to China and focusing more on the selling of its products.
Jay Aldeguer, president of homegrown Aldeguer Group of Companies (AGC), said some of the products of its subsidiary companies Loalde, Island Souvenirs and USA Sports are manufactured in China.
“One hundred percent of Loalde products are made in Hong Kong, while 50 percent of both Islands Souvenirs and USA Sports are made in China, Taiwan and Hong Kong,” he said.
According to Aldeguer, the country has already lost its manufacturing sector to China.
With almost all products made in China, he said branding now plays a vital role in the marketing of these products.
“Branding has never been so critical as today when manufacturing all happens in China. Most companies now rely on their brands,” he said.
Survival
However, Aldeguer said China’s low labor cost that translates to cheaper products is one of the reasons behind the survival of the country’s retailing business.
“The retail sector in Cebu has been growing,” he said.
In a separate interview, newly elected president of the Cebu Chamber of Commerce and Industry and former president of the Philippine Retailers Association Robert Go confirmed Aldeguer’s statement.
“There is growth in Cebu’s retail sector,” he said.
Go, however, said the entry of multinational retailing companies was threatening small retailers.
“Large retailing companies can dive the prices of their goods until such time that their competitors die. They can do this because they can earn from their mother companies. Once they succeed in eliminating their competitors, that is the time they increase their prices,” he said. JBN
(March 24, 2004 issue)
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