February 7, 2012

Toyota Tsusho shifts operations to Philippines

Toyota Tsusho Foods Corp (TTFC), an affiliate of Toyota Group of Japan, is shifting its formerly China-based seafood and marine products manufacturing operations to Philippines.

TTFC has partnered with its supplier of frozen shrimp, HJR International Corp of Cebu, to set up a joint business called Mandaue Cebu Marine Products Corp (MCMPC).

The gradual move of some of TTFC's business operations to the Philippines, according to documents obtained from the Board of Investments (BoI), comes as a result of ongoing problems with its Chinese supplier regarding labour, escalating fees and food safety issues in recent years, according to reports.

The new venture, MCMPC, will be a new producer of frozen fish fillets meant for export to Japan (TTFC), Saipan (Yaong Corp), Guam (Quality Distributors) and the US (Union Fish Company and Point Judith Seafoods). It will be located on 1 hectares, rented and owned by HJR.

MCMPC's factory in Mandaue City, Cebu will conduct processing, wholesale trading and the importing and exporting of seafood and marine products. The plant has a production capacity of 2.25 million kilogram per year and is expected to generate 256 jobs.

Commercial operations will begin in May.

BoI has approved the PHP86.26 million (US$2 million) project under a non-pioneer status which entitles MCMPC to four years of income tax break. Project financing is through 50% of stockholders' equity, with the rest from bank loan.

MCMPC will work with fillets of species such as Atlantic mackerel, chum salmon, hoki, horse mackerel, jack mackerel, merluza and Spanish mackerel sourced from a range of suppliers as required by its clients.

The manufacturing process will include defrosting, scaling, beheading, cutting, filleting, deboning, washing, layering, freezing, trimming, glazing, packing and finish product storage, according to the Manila Bulletin.

The economic activity is listed under the Investment Priorities Plan of 2011 under Export Activities. The export of manufactured and processed goods typically involves substantial transformation with at least 25% value-added to the raw materials/intermediate inputs.