Tuesday, May 13, 2008 Machinery parts, fabrication shops must grow in size to stay in game
IF small machinery parts and fabrication shops in Cebu remain as they are—small, run by a couple of family members, with low capital and no quality system—they may not be able to survive the competition or may not be able to grow, as other suppliers surrounding them are becoming big players in the global market.
Philippine Exporters Confederation (Philexport) Cebu executive director Fred Escalona said this type of business poses a huge potential as a contributor to Cebu’s economy.
But he shared that when he met with associations of machine shops a year or two ago, he learned that they are not yet formally organized and their potential in terms of market and capacity to produce still has to be confirmed in order for them to become part of the Philexport family.
“They are actually good. But if a company is ISO-certified, it will not look at these little machine shops and will not take the risk to turn to them but rather to another ISO-certified company as well,” he said.
Philexport-Cebu advocacy and public relations officer Ernesto Abines added that proper assessment, quantification and validation of the capacity of these machinery parts and engineered parts shops to produce should be initiated by government so that the right projects can be given to help the sector develop.
This is why the Export Development Council (EDC) review team led by retired Science and Technology Secretary Ceferino Follosco will be validating this year, among others, the capability of the machinery parts and engineered products cluster of Cebu to become a model cluster.
Follosco, in his PowerPoint presentation that the Department of Science and Technology (DOST) furnished Sun.Star Cebu, showed that this cluster includes agricultural and industrial machinery, motor vehicle parts and components, tool and die products, metal casting or foundry products, and building components.
DOST 7 identified more than 100 firms in Central Visayas and at least 70 established firms in Cebu outside the Mactan Economic Zones (MEZ) that offer these types of services.
Meanwhile, EDC, in a press statement, already identified five model export industry clusters in the country. Among them is the furniture cluster of Cebu.
Industry clustering involves the formation of organizations of related enterprises into one formal group that will pool their resources to solve common problems and attend to common needs.
From these model clusters, Follosco will be developing growth centers in every region or province “to facilitate the development of their industries.”
Escalona said this clustering is similar to their export diversification program where two components—markets and products—are hooked together, which is difficult to implement without a front organization such as Philexport-Cebu.
Philexport now has eight exporting sectors under its umbrella—gifts, toys and houseware; fashion accessories; furniture; industrial goods; garments; food; seaweed; and electronics--in the province. It is optimistic that the health and wellness sector will join the group this year.
“(But) the machinery parts and engineered products cluster outside (MEZ) is not yet under our umbrella. I look at this cluster as subcontractors and part of the value chain, so they play a key role in the (export) industry. But they need to be led by an organization such as Philexport-Cebu for them to become really credible suppliers,” Escalona said. (NRC)
