The chairman and chief executive of Emerson, the Missouri-based manufacturing giant, says investing in the Philippines is easy, allowing the company to expand in the country and generate jobs for more than 4,000 Filipinos.
“Investing in the Philippines has been easy. To be honest, the government has been a tremendous supporter for us. They have made it easy. They have been straightforward. They helped us in our demands, our requirements. It has been an ethical process and a very welcoming process for us. During good times, bad times, the government has been there for us and we appreciate that,” says David Farr, who has been leading Emerson as chief executive since 2000.
Farr visited the Philippines on March 26 to formally open a $35-million facility at SM Cyber West just across SM North Edsa in Quezon City. The new facility provides training and services to Emerson’s global, regional and local customers and space to accommodate future growth.
“It has been very easy decision to invest, because people make things easy to for us around the world,” he says.
Together with Emerson Process Management engineering and service center which opened in June 2014, Emerson’s investment in the Philippines over the past two years have reached $55 million, according to Farr.
Farr is only the third CEO of Emerson in nearly 60 years. Emerson, which was established in St. Louis, Missouri in 1890, is now a global leader in providing solutions for customers in industrial, commercial and consumer markets around the world. The company has five business segments, including process management, industrial automation, network power, climate technologies and commercial and residential solutions. Sales in fiscal year 2014 hit $24.5 billion.
Emerson employs 130,000 individuals across 220 manufacturing locations around the world, of which 150 are located outside the United States.
Farr, who has a bachelor’s degree in chemistry from Wake Forest University and master’s degree in business administration from Vanderbilt University, joined Emerson in 1981 in a corporate staff position.
His first visit in the Philippines was in the early 1990s. “Our first investment in the Philippines was in 1995 and that’s under President [Fidel] Ramos. We have made a big investment in the Philippines. It has been growing ever since,” says Farr.
“Around 1992 to 1993, we started investing in this region from the manufacturing standpoint. What we realized is we need to build a customer support organization and capabilities. The people here in this organization could focus on making this happen and became a very important in the growth strategy of supporting our customers, our finance, technology,” says Farr.
Emerson began operations in the country with Emerson Network Power establishing its presence in 2001, followed by other Emerson businesses and support functions in subsequent years. Emerson currently employs 4,400 individuals in four offices or facilities in three locations in Mandaluyong City, Pasig City and Quezon City.
“The opening of this [Quezon City] facility is very important. It is a great milestone in the history of Emerson in the Philippines and especially in the 125th year as a company. We have been doing business in the Philippines since the mid 1990s. I was involved in that personally,” says Farr.
“Network Power came here in 2001, customer support in 2002. Today, we have around 4,400 employees here in the Philippines across three locations. We have great employees,” he says.
Farr says Emerson’s Philippine operation is led by a good team. “We have a lot of people from this organization who are now running Emerson organizations around the world,” he says.
“This is the sixth or seventh building I visited since I have been coming here. We still have employees here since day one, a great group of people,” says Farr. “This organization has been a very important contributor. They are involved in so many parts of Emerson. They have grown from just pure customer service, to technology, to supporting global infrastructure of Emerson. You walk around this place, and you will see the technology and the passion for this company.”
“The reason we continue to invest in the [Asian] region is the people. All our customers truly appreciate what the organization in this country has done for us globally,” he says. “The people of this organization touch so many of Emerson’s operations. That’s why I come here as often as I do,” he says.
Farr says the new Emerson facility in Quezon City “manifests our commitment to the Philippines.”
“We have invested in this country since 1995 and employed a lot of people. When you include the investment in this new facility, we have invested over $55 million over the last couple of years and we have commitment to the organization and the country.”
Farr says the new Emerson facility is focused on serving customer base relative to overall growth. “Last year, we grew the Philippines around 8 or 9 percent. We would like to grow more in the Philippines. That’s why we have the customers coming here. The Philippine economy is growing right now. We do very well in Asia. In Asia, we will probably grow 4 or 5 percent. Worldwide, we will grow less than that. This organization is about supporting customers around the world,” says Farr.
Sales in the Philippines reached about $50 million in 2014, but the Philippine facilities provide services to other centers and operations of Emerson around the world. The Quezon City center, for one, provides customers with specialized facilities, such as the integrated solutions center, Emerson Process Management’s technical learning center and Emerson Climate Technologies Partner Plus technical and training center.
The facilities in Mandaluyong and Pasig support the business units’ engineering, product development, customer support, advanced services, operations and marketing and sales support functions in Asia Pacific and globally.
“Emerson is a great large company. Globally, we have $25 billion [in sales]. We have 130,000 employees. We are a very global company. About 60 percent of our sales are outside the United States. Our largest region is Asia-Pacific,” says Farr.
Farr says while Emerson also opened other global shares services facilities in Costa Rica, Romania and China, the Quezon City center is “by far, our largest center, more strategic and the most knowledgeable center that we have.”
“I expect the organization to continue to be vibrant and start to add value to us, and look at how we can serve our customers in the Philippines and the region,” he says.
Phil Kelaart, the vice president and general manager of Emerson Philippines, says the operation in the country has been growing 10 percent annually for several years now.
“What fuels this growth? We do something very unique here in the Philippines for Emerson and that is, for every single product and every business unit of Emerson here in Manila, we support about every function in those businesses,” says Kelaart. “We have been growing about 10 percent for several years. This center will enable us to grow at that rate over the next several years.”
Farr says he is optimistic about the expanding role of the Philippines in Emerson’s global operations. “This organization has matured in skills set. What we are trying to do is to take that capability and knowledge to expand services. What they are is a service organization. They don’t manufacture products here. They manufacture knowledge and service and that is what is unique in this organization. I watched the organization and leaders here grow and mature,” says Farr.
He says Emerson will continue to invest in the country. “With the innovation and knowledge that we have here since 1995, this is the culmination of what is to come,” he says.
“The people in this organization are doing a phenomenal job, creating unique skills to support the company is so many different ways. We are gonna keep growing here, if the government allows us to,” he says.