Ayala’s manufacturing unit bets on digitization, electric vehicles in post-COVID boom
Makati, Philippines – December 14, 2020 Optimistic about the country’s recovery in 2021, the Ayala group believes the manufacturing sector can help accelerate this by investing more in digitization and pivoting toward changing global demands.
Last Thursday, the Department of Trade & Industry (DTI) and Board of Investments held its annual Manufacturing Summit, where senior leaders from the Ayala group were invited to talk about the conglomerate’s innovations under the theme “Rebuilding Towards a Smarter and Resilient Manufacturing Sector.”
“What this pandemic has brought upon to the world and specifically to the manufacturing industry is a reset button. So opportunities that were previously not available to our country, to participate into that global supply chain, are now available. But at the same time, challenges of the status quo that we were able to live with under the old regime has also transformed... So how the Philippines will be able to play within that sphere of changes as it evolves, I think it is going to be very important for us to manage. Within the Ayala group, we have chosen to invest in the manufacturing and localization of selected technologies that are aligned with these macro and industry developments, such as in electric mobility, connectivity and IoT, and smart energy,” said Arthur R. Tan, President & CEO of AC Industrials and CEO of Integrated Micro-Electronics, Inc. (IMI).
This year, AC Industrials, which holds Ayala’s industrial technologies businesses, created several relevant and impactful solutions to adapt to changing market needs that have arisen from the pandemic.
IMI is accelerating its digital transformation to build resiliency against future disruptions. It is investing in data engineering and expanding its real-time analytics capability that could help provide more value to customers and reduce overall operating costs.
As the world gradually shifts toward cleaner, more sustainable living, AC Industrials has invested in manufacturing critical components from power modules and EV charging infrastructure to high-value specialty solar gridded cells and panels. It is also looking into the potential expansion of its motorcycle business into the electric space.
AC Motors, on the other hand, is reimagining its retail model post-pandemic. It seeks to satisfy consumers’ automotive demand in the digital space through virtual showrooms, online sales platforms, and mobile aftersales capabilities.
Scaling up manufacturing initiatives
Five years after partnering with Europe’s largest motorcycle manufacturer, the KTM joint venture factory in Laguna has manufactured over 20,000 motorcycles, exporting the majority of these to China. Domestically, 60% growth in Philippine KTM sales during the second half of 2020 due to the increased demand for personal transportation.
Pivoting to meet demands
IMI’s Laguna facility, which focused solely on electronics manufacturing prior to the pandemic, now produces up to two million face masks per month. The company also developed solar-powered hands-free sanitizing booths, which have been rolled out in various AC Industrials sites in the Philippines.
IMI also heeded the call of government for the local production of critical medical equipment. In May, the company introduced the localized UCL Ventura Flow Generator, a non-invasive ventilatory support device designed to help COVID-19 patients avoid the need for intubated treatment. This FDA-approved device is the first breathing aid solution to be manufactured in the Philippines.
“Establishing a solid, globally competitive manufacturing sector can diversify and strengthen the country’s economic base… This [pandemic] now opens a fleeting window for countries like ours to serve as alternative manufacturing locations, and consequently demonstrate the potential to host global firms who seek to build footholds in Asia… As we collectively forge past the pandemic, both the public and private sectors thus have vital roles to play – not only in rebuilding the country’s manufacturing capacity but transforming it for greater global relevance,” said Ayala Corporation Chairman & CEO Jaime Zobel de Ayala, who in his keynote address called this a “rare opportunity.”
“The Ayala group remains committed to being an enabling partner of the government as it seeks to not only rebuild but transform the Philippine manufacturing sector for greater global competitiveness post-COVID-19. We and other private businesses can complement the government’s efforts by creating new jobs aligned with the post-pandemic economy, helping reskill the workforce, and localizing the high value, complex capabilities required for long-term national competitiveness,” Zobel concluded.
With the support of government, the Ayala Group continues to aggressively pursue its manufacturing initiatives, with the hope of contributing to the country’s competitiveness and resiliency in a post-COVID world.
Ayala Corporation Chairman & CEO Jaime Augusto Zobel de Ayala (leftmost) and AC Industrials President & CEO and IMI CEO Art Tan (second from left) observe a prototype of IMI’s UCL Ventura Flow Generator. This technology is the first breathing aid solution to be manufactured in the Philippines. It is a non-invasive alternative ventilatory device that was localized from IMI’s UK subsidiary’s tech. It was designed to help patients with mild COVID-19 symptoms avoid the need for intubated treatment. IMI received FDA approval for this innovation in July 2020.