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Cal-Comp Technology: PH is next core manufacturing hub

Firm’s P6.77 billion IPO to finance facility expansion, new equipment, R&D

Global tech parts giant Cal-Comp Technology (Philippines), Inc. (Cal-Comp Technology) has marked the Philippines as its next main hub in Southeast Asia for manufacturing, and is looking to reinforce its existing operations in the country through its P6.77 billion initial public offering.

According to Simon Shen, CEO of New Kinpo Group (NKG), Cal-Comp Technology’s mother ship, the group has decided to increase the Philippines’ capacity for production as NKG shifts the focus of its operations in China. “China will move towards higher level R&D, so its manufacturing component will slowly be transitioned to the Philippines. This IPO will allow us to raise the funds needed to support the said transition and help the Philippines enhance its manufacturing and R&D strengths.”

In a recent filing with the Securities and Exchange Commission (SEC), Cal-Comp Technology is aiming to raise P6.77 billion mainly for facilities expansion, acquisition of new equipment, and increased investment in research and development. It will sell up to 378,071,100 primary common shares, and targets to list before the end of the year.

Two new facilities to be constructed

Cal-Comp Technology has earmarked P1.88 billion from the IPO proceeds for the following purposes. First, use for the construction and development of phases 2 and 4 of its First Philippine Industrial Park, Inc. (FPIP) manufacturing complex in Sto. Tomas, Batangas, where its subsidiary, Kinpo Electronics (Philippines), Inc. (KPPH) is located. This will add approximately 48,000 square meters of space for manufacturing. Second, additional facilities will also be built inside KPPH’s Lima Technology Center site in Lipa, Batangas.

Cal-Comp Technologyis also targeting to enter into additional land leases within FPIP that will cover a land area of approximately 300,000 square meters to increase its manufacturing capacity. Approximately P1.26 billion of the proceeds will be allocated for this purpose.

The said facility expansion will require the acquisition of P844-million worth of new assembly equipment and machinery, as well as the upgrade of existing equipment that will increase production capacity. These acquisitions will include surface mount technology (SMT) and assembly lines for storage, home appliance, and calculator products.

 

Renewed focus on R&D

Cal-Comp Technologyalso intends to further harness Filipinos’ talents by investing approximately P800 million on research and development for the introduction of new products expected to come out in the next four to five years.

Another P243.7 million of the proceeds will be used for other capital expenditure requirements, which include the purchase of miscellaneous equipment and computer software required for the Cal-Comp Technology’s production operations.

Finally, Cal-Comp Technologywill allocate P900-million to repay KPPH’s short-term loans with Metrobank and Cathay United Bank which provided additional working capital.

Shen adds, “We are ramping up investments in the Philippines because we believe in the country’s economic potential. With an increasingly tech-grounded world, we intend to expand Filipinos’ access to technologically-advanced products, equipment, and training.”

Cal-Comp Technologyis engaged in global electronic manufacturing services and original design manufacturing. It produces multiple product lines including external hard disk drives, TVs, all-in-one PCs, laser printers, smart home appliances, power supplies, 3D printers, innovative smart beauty mirrors, AI humanoid robots, and integrated circuits for cloud computing, among other products.

It is also set to launch its own-branded products to the Philippine market within the year.