Ford to invest on Flex-Fuel engine manufacturing in the Philippines

Ford to invest on Flex-Fuel engine manufacturing in the Philippines image

Text: / Photos: | posted January 25, 2006 00:00

In his visit to the country, Ford Motor Company Corporate Vice President and President of Ford Asia Pacific and Africa, Peter Daniel, announced company plans to invest P1.1 billion to build a Flexible Fuel engine plant in the Philippines. A Ford first in the region, the investment further establishes Ford's innovation leadership in Flexible Fuel technology and the use of bio-ethanol fuel. Ford's Flexible Fuel engines are designed to operate on either conventional gasoline or a combination of gasoline and bio-ethanol fuels.

The investment translates to production of 100,000 engines over the next five years valued at about US$100 million. Start-up activities will be undertaken in the first quarter next year, with full production to begin before the end of 2006.

"We expect that this new investment by Ford will take the Philippine automotive industry to its next level of development by establishing its leadership in the Flexible Fuel technology in the region," said Daniel. "Flexible Fuel technology is part of Ford's global vision on innovation, and with this investment Ford intends to build the Philippines as its ASEAN Center of Excellence in Flexible Fuel Technology."

Earlier, Daniel made a courtesy call on President Macapagal-Arroyo in Malacañang to formally inform her about the investment and express appreciation for the support the government has given to Ford's operations in the Philippines. His visit is generally seen as an indication of the importance of the Philippines to Ford's growth strategy in Asia Pacific.

"Our view of doing business here remains positive, as we continue to grow our existing exports operations and increase capabilities with our new engine manufacturing project. We also have confidence in the capability of our Filipino workforce which has significantly contributed to the success of our export operations," Daniel informed the President.

Success of export program led to new investment

This latest investment from Ford is proof of its commitment to grow the Philippine business and build on the success of the export program.

In October 2003, Ford Chairman and CEO Bill Ford was also in Malacanañg to pledge an investment of US$50 million to build the Philippines as an export hub for ASEAN. The investment made possible the full transition of the Ford Philippines Santa Rosa plant from a domestic player to a regional hub for the manufacture of compact cars and SUVs. Ford Philippines is also one of only four production hubs for the Ford Focus in Asia Pacific, with China, Taiwan and South Africa as the other bases.

Ford is the first and only volume exporter of vehicles from the Philippines. The success of the export program can be attributed to the world-class vehicles being produced at the Santa Rosa plant. Currently, Ford Philippines exports the Focus and Escape, and the Mazda3 and Tribute to several ASEAN countries-bringing cumulative exports from the start of the program to end 2005 to some 40,000 vehicles valued at approximately US$500 million.

To support the demand for the new Focus in ASEAN, a second shift at Santa Rosa was added in September this year, bringing total direct employment to 1,250 workers and doubling production capacity from 18,000 units to 36,000 units annually. This move also benefits parts makers in the country who are supporting Ford's export operations.

Alternative fuels and bio-ethanol

The building of the first Flexible Fuel engine facility in the Philippines is aligned with the government's alternative fuel program that aims to reduce dependence on imported conventional fuel and promote a cleaner environment while potentially spurring agro-industrial investment in the rural areas through the production of bio-ethanol fuel.

The engines from the Philippine plant will be used in the production of Flexible Fuel vehicles (FFVs). Currently, Ford Motor Company has more than one million ethanol-powered cars and trucks on the road. In North America, four new vehicles are planned for 2006 that will largely run on ethanol, increasing the production of FFVs in 2006 to as much as 250,000 units. Ford's interest in using ethanol as an alternative fuel goes back to the days of its founder, Henry Ford, who experimented with ethanol to power his Model T invention.