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Philippine news services are reporting that outdoor power equipment engine manufacturer Briggs & Stratton is relocating it's China manufacturing facilities to the Philippines.
The Manila (Philippines) Bulletin wrote that Trade & Industry Secretary Juan Santos announced the relocation saying that Briggs & Stratton will transfer its single-cylinder gasoline engine manufacturing operation to the island nation for exports to Briggs & Strattong Shanghai, it's marketing subsidiary, for the first five years and later to serve the Phillipine market. An article on Forbes.com notes that the move is the result of rising production costs in China.
Allied Motors Philippines (AMP) is currently the sole distributor of Briggs & Stratton (B&S) products. The company has invested P35 million ($647,549) including the value of the asset purchase agreement that was made with Briggs & Stratton Chongquing in China.
"B&S needed to pullout its production of single-engine-cylinder gasoline engines from B&S Chongqing in China as a strategic move to maintain the price competitiveness of the product," Santos said.
B&S Chongqing was a joint venture between B&S USA and the Chinese government and part of the agreement is for the Chinese government to provide a manufacturing site. However, financial difficulties forced the Chinese government to give up its share of the company and force B&S Chongqing to rent a new plant site, increasing production costs. However, the report notes that B&S believes the Chinese plant is still the better place to manufacture new aluminum engines.