IMI building manufacturing facility in Serbia

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AYALA Corp.’s automotive and electrical parts manufacturing unit Integrated Micro-Electronics Inc. (IMI) is looking to sustain its growth by building another manufacturing facility in Niö, Serbia.

IMI Chief Financial Officer Jerome S. Tan told reporters after the company’s annual stakeholders meeting that the new facility will ensure their growth momentum for another two to three years.

He said that the Serbian facility will be “more of an extension of IMI Bulgaria.”

Mr. Tan said that in terms of revenue, the new facility can bring about $250 million to the company.

The facility, which will be producing the same materials as the Bulgarian site, is expected to churn out automotive electronics and LED lighting.

Currently in the first of three developmental phases, the hub is expected to be complete by September or October this year.

Mr. Tan, however, said that at present it is difficult to gauge the volume of production given that it would depend on the product.

Aside from the Serbian facility, IMI already has 19 manufacturing plants in eight countries.

“This investment in Niö is in anticipation of what we see [as] the pipeline [of contracts] that we’ve been winning,” Mr. Tan said. “We would need additional capacity, and because we cannot expand anymore, then that’s why we went into Serbia.”

In the meantime, Mr. Tan also said that they will be focusing on their core business and have not set any plans for acquisitions in the near future.

IMI chief executive officer Arthur R. Tan, in his speech during the annual stockholder’s meeting, said that the company has set its sights on developing the Internet of Things, smart energy such as lightweight solar panels, and mobility such as aeronautics and self-driving cars.

Ayala-led IMI, which also won the contract to manufacture and distribute Austrian motorcycle brand KTM AG, is expecting stronger sales driven by demand.

The facility, which can produce from 27 to 30 units a day, has the capacity to churn out 60,000 units annually. Since it first started production, around 2,500 to 3,000 units have been made so far.

IMI already shipped 168 units of the motorcycle to Thailand early this year, and is set to export to China by this month or by May.

The company has allotted 4,000 to 5,000 units of the motorcycle this year for the domestic market from last year’s 2,000 units. This is amid plans to increase the number of dealerships from 24 to 32 by the end of the year, and 72 multi-brand distribution channels.

IMI has been under AC Industrial Technology Holdings, Inc. since March 2017, which consolidates the conglomerate’s automotive and manufacturing assets.

IMI saw its revenues increase by 29% to $1 billion in 2017, with the biggest contributor coming from its automotive business.

Most of its revenues came from Europe with 48% of the total share, followed by Asia — with Japan included — at 30%. North America made up the remaining 22%.

IMI also managed to secure $314-million worth of contracts, most of which come from its automotive components last year.

The company’s shares on Friday went down by P0.40 or 0.24% to P16.60 from Thursday’s last trading price of P16.64. — Anna Gabriela A. Mogato