February 5, 1998 (MANILA) -- Disk drive maker Seagate Technology
Inc. will complete construction of a US$70 million read-write
head plant in the Philippines.
It is moving ahead despite the ongoing regional financial crisis
that has caused international economists to downgrade their
growth projections for Asian countries, particularly those in
Although the plant will be completed, Seagate said there are no
definite plans for production yet.
"Constructing the plant will take a while. Depending on how the
industry turns out, we'll make a decision then," said Teh Ban
Seng, Seagate's manager for the South Asia Pacific region.
The US$70 million investment covers cost of the land and building
the plant in the western Philippine province of Cebu, Teh said.
Seagate said construction of the plant in Cebu would be completed
in the first half of 1998, as previously planned.
The read-write head plant is Seagate's first investment in the
Although Seagate's plans for the Philippines remain unchanged,
Teh said the company is stopping the production of disk drives in
Thailand during the current quarter. Seagate will continue to
make the various components it produces there, however.
In Asia, the company manufactures disk drives in Singapore,
Malaysia and China.
Earlier in February, Seagate announced plans to cut a total of
10,000 jobs, or 10 percent of its global workforce, as part of
its restructuring to improve efficiencies.
In Singapore, where Seagate makes its high-end disk drives, some
1,800 jobs have been cut in the last three months.
Another 750 jobs were cut in Malaysia, where Seagate said it
would halt head stack and head gimbal assembly operations in its
Penang and Ipoh facilities and reduce disk drive assembly
operations in Perai by mid-February.
Job cuts in Thailand are expected in February, Seagate said.
For the second quarter ended Jan. 2, 1998, Seagate recorded a net
loss of US$183 million, or US$0.75 per share, including a
restructuring charge of US$205.5 million and other special
Revenues in the quarter fell 30 percent to US$1.67 billion due
mainly to increased competition resulting in significant price
cuts and continuing weak demand for disk drives.
Philippine Trade and Industry Secretary Cesar Bautista said the
government remains optimistic that companies engaged in
information technology, electronics, telecommunications and other
related industries will continue to find the Philippines an
attractive investment site despite the regional currency crisis.
He noted that international economists and even multilateral
lending institutions such as the International Monetary Fund have
acknowledged the fact that the Philippines isn't in as bad a
situation as the other Southeast Asian countries grappling with
the six-month-old regional currency crisis, particularly Thailand
(Margarita Roa, Asia BizTech Correspondent)