Japanese Firm Epson Stops China Expansion, Builds Biggest Factory in Batangas

Updated 12/15/2015 – MATSUMOTO, Nagano Pref. | Japan’s biggest printer maker and electronics giant Epson has no plan to expand its production plant in China due to increasing labor cost and deteriorating quality, Epson Philippines country manager Toshimitsu Tanaka told reporters.

Tanaka made the pronouncement during the launching of the expansion programme for Epson’s manufacturing plant in Batangas, Philippines. Tanaka said China’s labor cost is higher by almost 20% compared in the Philippines.  Epson is gearing up for the JPY12.3bn (USD101m) expansion of its plant in Lipa, Batangas.

The Batangas plant is currently the biggest Epson factory outside Japan and its $101 million expansion will make it the company’s biggest manufacturing plant in the world. The Batangas plant is currently employing 12,500 workers and the planned expansion which is likely to operate on late 2017 could grow the labor force by 20,000 in three years.

The plan is to increase production of projectors and large-capacity inkjet printers, sales of which are growing primarily in developing countries. The scale of the new facility’s output has not been disclosed.

The existing Philippine plant is Epson’s primary overseas production site for large-capacity inkjet printers. Sales volume of that type of printer is expected to grow 50% to around 4.5 million units in the year ending in March.

Epson’s move is not part of planned 200 Japanese companies in China that will relocate to the Philippines. The deteriorating relationship between Japan and China is seen by many economic experts as highly favorable to the Philippines and Vietnam as primary target of Japanese investors.

Scheduled to start operating in spring 2017, the new plant will have 100,000 sq. meters of floor space.  With 10-hectare floor area, Epson will be the biggest manufacturing plant in the country.

/Hideo Fokuda/ Assisted Press Tokyo

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