New Maersk facility a boost to Philippines’ logistics ambitions — Marcos

DENMARK-BASED A.P. Moller-Maersk has opened a $4.8-billion (P280-billion) distribution facility in Calamba City that President Ferdinand R. Marcos, Jr. said would help decongest Manila and unlock economic potential in the countryside.

This is a significant investment in the Southeast Asian nation’s transport and storage sector, whose market size is projected to grow to P1.16 trillion by 2027, Mr. Marcos said in a speech at the opening of the Maersk Optimus Distribution Center on Wednesday. 

“This strategic location in Calamba aligns with our efforts to decongest Manila and to unlock the economic potential in the countryside,” he said.

Calling it one of the Philippines’ largest logistics centers, Mr. Marcos said the Laguna facility would bolster import and export activities in Southern Luzon, including the Bicol Region.

“With the grand opening of the Maersk Optimus Distribution Center, our logistics system would be a step closer to becoming a powerful force — bridging our islands, breathing life into our industries, our businesses, bringing together our people on a path towards sustained development,” he said.

The Maersk facility has a 70,000-pallet position capacity racking system with cantilever and a 3,281-square meter (sq.m.) mezzanine area for value-added services such as bundling, repacking and stickering, according to the Presidential Communications Office.

The facility has 73 docks to accommodate all truck sizes, a 500-sq.m. battery room that can accommodate 28 units of reach trucks at a single time, and a one-glance room for live monitoring of operations.

Economists said the new logistics center will help in boosting economies of scale in a region notable for the presence of manufacturing sites.

The region has 31 world-class industrial estates and economic zones, most of which are known for semi-processed industrial raw materials and industrial components, according to a regional profile from the Trade department.

“The new logistics facility would be strategic in Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) where there are many industrial parks, economic zones, and foreign locators,” said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort, noting that manufacturers in the region have huge logistical needs.

Mr. Ricafort said Calabarzon is a “strategic logistical hub,” given its proximity to Metro Manila and lower rental and lease rates that would reduce operating costs for companies.

Terry L. Ridon, convenor of infrastructure and investment think tank InfraWatch, said the new logistics center is “one of the best examples of how to decongest Metro Manila,” and may attract more manufacturers to set up shop in Calabarzon.

“We look forward to more firms setting up shop in areas outside Metro Manila, not only to decongest the capital region, but also to spur local economic growth and provide jobs to communities within these economic hubs.”

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the Maersk facility may encourage more investors in the region.

“It will industrialize the region, further creating jobs,” he said via Messenger chat.

Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University, said the growth in the logistics sector may not give a significant boost to the manufacturing sector since it “primarily facilitates the import and distribution of finished goods, with less focus on supporting local manufacturing activities.”

“While a theoretical link between skills and manufacturing exists, much of the logistics growth could be driven by the Philippines’ role in global supply chains, focused on transporting goods rather than producing them,” he said via Messenger chat.

“The Philippines in fact has a small base of related industries that would support manufacturing growth, such as suppliers for parts or raw materials,” he added. “Without these, manufacturing companies may find it difficult to operate competitively, even with improved logistics.”

Localized supply chains remain the key to having a powerful manufacturing base, he noted.

Meanwhile, Mr. Ricafort said he expects more foreign companies to set up shop in Calabarzon since it has a steady supply of workers with many colleges and universities present in the region.

He also cited the region’s accessibility to cheap housing communities.

For the first year of its operation, the Maersk facility in Calabarzon is expected to employ 1,000 workers. It’s also projected to create indirect employment for 1,000 people from micro, small and medium enterprises.

“The Maersk Optimus Distribution Center is expected to create employment for one thousand people in its surrounding communities and indirect employment for another thousand individuals — from vendors and service providers to truckers and beyond,” Mr. Marcos said in his speech. — Kyle Aristophere T. Atienza