Investing for the long haul
Published Jun 12, 2018 12:00 am
By Bernie Cahiles-Magkilat
Simon Shen
Chief Executive Officer
NEW KINPO GROUP Taiwanese industrial conglomerate New Kinpo Group (NKG) is a loyal investor in the Philippines. It is the country’s biggest investment from Taiwan, so far. NKG’s affinity to the Philippines is not only due to the oft-repeated Filipino attributes for their English language facility, highly-skilled, happy and friendly workforce, but also because of the business potential the country can bring to the table. Simon Shen, New Kinpo Group CEO, has lofty ambitions for the Philippines, one of only two countries in ASEAN where it is investing, pinning his hopes on the country’s continued economic growth. Shen is setting the stage for the Philippines as a very critical component for its expanding business. New kinpo Founded in Taiwan in 1973, the New Kinpo Group has grown to become one of the biggest industrial companies with estimated combined revenues of $38 billion in 2018. Shen’s group alone with 12 business units is expected to contribute $6.8 billion in revenues this year. NKG has 72 factories employing 108,138. NKG is a global electronic manufacturing services (EMS), original design manufacturing (ODM) and own-branded Group that offers innovative technology, world-class quality products, competitive cost and on-time delivery to its customers around the world. NKG’s EMS and ODM business spans multiple product lines, including external hard disk drives, network-attached storages, TVs, set-top-boxes, all-in-one PCs, laser printers, electronic keyboards and floor-sweeping robotics, smart home appliances, power supplies. NKG also creates new technologies and its own product brands such as 3D printers, innovative smart beauty mirrors, AI humanoid robots, artificial intelligence products, design system-on-chips (SOC), and integrated circuits for cloud computing, etc. In the Philippines, NKG’s investments consist of Cal-Comp Technology (Philippines), Inc., Cal-Comp Precision (Philippines) Inc. and AcBel Polytech (Philippines) Inc. The group first invested in the Philippines in 2000 when its AcBel Polytech Inc. established AcBel Polytech (Philippines). AcBel produces printed circuit board assemblies, switching power supplies, transformer, and cable assemblies in Carmelray Industrial Park II in Calamba, Laguna with 1,500 employees at present. Meantime, NKG has bigger operations in Thailand since 1990 and eventually became a listed company there with revenues of $4.5 billion and employing 18,000 workers producing data storage products, semiconductors, and communication devices, modems and routers, among others. The electronics giant has also big investment in China, but they have encountered problems on rising labor cost and shortage of workers. “I foresee they have more problems in China, so in 2010 we started thinking of maybe doing more,” says Shen. In 2010, NKG decided to expand its presence in southeast Asia. They shortlisted Vietnam and the Philippines. Finally, NKG chose the Philippines, paving the way for new investments. A new subsidiary Cal-Comp Technology (Philippines), Inc., the parent company of Kinpo Electronics (Philippines), Inc. was established in June, 2012. Cal-Comp Technology produces graphic calculators, calculators, electronic keyboards, LEDs, hard disk drive PCBAs, external hard disk drives and various home appliance products. It is located in two locations: Lima Technology Center in Lipa city, Batangas and First Philippine Industrial Park (FPIP) in Sto. Tomas, Batangas. The company has 6,350 employees. Cal-Comp revenue in 2017 reached $210 million, and its estimated revenue in 2018 is expected to hit $500 million. This was followed by Cal-Comp Precision (Philippines), Inc., a subsidiary of Cal-Comp Precision (Thailand) that manufactures plastic injection parts, was established in February, 2016. It is located in First Philippine Industrial Park (FPIP) in Sto. Tomas, Batangas. It currently employs 1,500 people. Notably, NKG’s production in the Philippines are almost all geared for the export market particularly US, Japan, Europe, and China. The Philippine operation, however, is just a miniscule of the entire group’s operation. “But we continue to hire and invest more in the Philippines,” Shen adds noting they expect to have a total of 8 factories in the country by the third quarter of 2019. “Now, we have four entities in the Philippines with around 10,000 workers,” says Shen. It has invested roughly $180 million, but Shen said this could reach $250 million in the next three years. Robotics/AI Under Shen’s leadership, NKG has reached new heights with the acquisition of new plants that house the production of new technologies such as the 3D printer, smart beauty mirror, artificial intelligence products, and a design system-on-chip (SOC) integrated circuits for cloud computing. It has gone into robotics and is expected to forge partnerships with enterprises for the use of their new technologies. It is coming up with a strengthened own brand, as well, beyond its being an OEM manufacturer. For instance, the company is participating in the growing beauty industry by coming up with a smart beauty mirror that can analyze skin types, imperfections and collect data into what could be the world’s first skin data bank. Shen said the Wi-Fi-enabled smart mirror will not store the image of the user nor his or her personal data, just the skin analysis. The mirror, which has to be launched yet, is equipped with a technology that also connects the user to recommendations for products suited for one’s skin and on to the vendor of these beauty products. Product orders for delivery can also be done via the smart mirror. The mirror’s software is upgraded periodically to scale up its capability and applications. This magic mirror is being produced in Thailand. “We are the first one to introduce this product,” says Shen, who finished Public Administration at the National Chengchi University in Taipei. On top of that, NKG is also developing an AI or its smart speaker with special language capability. It can communicate in the Tagalog-English language to suit to the targeted Filipino domestic market. This is on top of its English language capability. NKG’s smart speaker’s unique Tag Lish language will differentiate it from all other smart speakers of other companies that have only the English language capability. “We already have 130 engineers in the Philippines working with our Taiwanese engineers,” adds Shen, who finished his law degree from Whittier Law School in the US and an MBA from the University of Southern California. The team is trying to differentiate the NKG AI with the existing AI of other companies. Both the smart mirror and smart speaker devices are expected to be launched next year. Shen, who became NKG CEO at the height of the global financial crisis in 2008, said he was able to overcome the challenges by coming up with a vision. It was during that difficult transition period that together with his people, they came up with a vision for the company to evolve their manufacturing operation into the new technologies like AI and robotics. Looking back, Shen stressed that a company’s vision is so important to remain afloat, especially for a firm like NKG where returns are not expected in the short term, but for the longer term. He said that pursuing new technologies in robotics, automation and AI are the things they needed to do to stay relevant. It makes the business so dynamic and attune with the times. Shen himself echoes the excitement the new technologies bring, far from the technologies 40 years ago. Already, he sees the mobile phones becoming obsolete. In fact, he cited reports that sales of mobile phones are going down as complementary mobile gadgets are coming up such as 3D projectors where a small box with 3D dimension would just pop up. The visionary Shen foresees a totally new kind of technologies that will replace the traditional way of doing business. He sees NKG’s products leading in these new technologies, further driving growth, and impacting lives. “I really understand that AI will transform lives,” he adds. IPO plans According to Shen, NKG is considering of conducting an IPO in the Philippines. Actually, NKG does not need the money, but the IPO has a bigger purpose. In fact, it is more expensive to conduct an IPO in the Philippines than in Taiwan, but, he believes, it will be worth it. Proceeds from the IPO may also be used for future expansion as they continue to build more factories, but that is not what they are really after. Shen reiterated the company’s image and stature in the country after becoming a public company. This in preparation for their eventual entry in the domestic market as they bring in new innovative products to Filipinos. Once listed at the local stock market, they can be easily recognized by Filipino consumers. Growth of the Philippine economy is still largely consumer driven. “What is more important is our reputation in the Philippines, we consider the domestic market a big potential for us so while we grow the exports market we also try to grow in the domestic market,” he adds. Although the IPO plan is still under discussion, NKG, through Cal-Comp Philippines, intends to bring global consumer technology grounded on AI and robotics to the Philippine market, through increased investment and introduction of new products. NKG aims to increase investments to $250 million in three years from the current $180 million, according to Shen. Company revenues from the Philippines may also hit $500 million this year and $720 million in 2019 from $297 million in 2017. “We continue to grow our manufacturing and export business as well as expand in the local market,” Shen adds as he has been unsatisfied by his group’s $6.8-billion contribution to the overall organization’s coffer. That is why, he is pushing for more growth. Shen expressed confidence that its growth in the Philippines is safely anchored on the good domestic economics and highly-skilled English-speaking workforce, whom he cited for being dedicated as happy people. Besides, he said, the Philippines is quite a good source of engineers, which would be of great help in driving the growth of the company. Bullish As they grow, NKG will not be the only one investing, but suppliers that they tag along to the Philippines. At present, they have 7-8 suppliers that followed them here which are also exporting on their own. Shen also raised the possibility of bringing into the Philippines their 3D printing and design services from Taiwan. If the domestic market is growing, Shen said they can also produce the smart mirror in the Philippines, too. “It was only this year that we thought of selling our own brand because of opportunities of the local market,” he adds. With the strong domestic economy, Shen expects corresponding increase in their business, that means training more people and creating more jobs. He said the Philippines is into that growth pattern of development from agriculture, mining to manufacturing just like how the other industrialized countries started. This is in the same manner that NKG developed their manufacturing capability for the past 10 to 20 years and is now into higher tech knowledge products. “Now is a good chance for the Philippines because some companies are considering to exit China,” he adds noting that most companies in China are now focusing on high tech products for the domestic market because of the high cost of labor for manufacturing. Aside from Asia, NKG has also factories in the US, Mexico and Brazil. Shen noted how governments, particularly India, have become so aggressive in attracting foreign investors because of the need to provide jobs to people. He also cited the government’s efforts to increase supply of power to help reduce the high cost of electricity to help attract foreign investors. “There is no perfect place, but we chose the Philippines because of the highly-skilled and English-speaking Filipinos, who are also very friendly,” says Shen, who has been with the Kinpo group for 17 years already. Suitcase life Shen, who literally lives in a suitcase, tries to be in the Philippines once a week. But he sees to it that he is home in Taipei on weekends. His travels though are strictly business that he is either billeted in a hotel or in the company’s dormitory in their factories in the Philippines. Just too busy for leisure trip that Shen was only able to go out of Manila once when he visited Cebu for a business meeting. Despite his close relationship with the top boss of the Kinpo conglomerate, Shen never takes his role as CEO for granted. A very hands-on boss, Shen reports for work at 7:30 in the morning and leaves office at 7 in the evening to have dinner with his wife, three kids (two daughters 13 and 16 years), and a 7-year old son. His nights are also kept busy with conference calls because of the different time zones of the other factories’ locations. NKG is not all business. In the Philippines, Shen is passionate in improving the lives of the less fortunate Filipinos as the company supports scholarships for kids. Shen, however, would like to do more. He was toying with the idea of spearheading an initiative that will give these kids, not just the formal school setting experience, but exposing them to other cultures and learn from each other. “I believe a lot of Filipino kids would like to learn the Chinese language while other Chinese kids would also like to learn English so why not create a real local setting where they can learn from each other,” says Shen. This 52-year-old businessman was thinking of companies, which always compete for financial bottom lines, adopt this kind of program to expose the less privileged children to a new environment. He reflected that while he brings his kids to summer camps in Europe and the US to expose them to different cultures, views and lifestyle, the kids of low income families are deprived of this privilege. By doing so, these kids will have an open mind and not just think of a world as a small village. Among the local business leaders, Shen looks up to Tessie Sy-Coson, vice-chair of the SM Investments Corp., for her vision. He calls her a “very impressive” and “capable leader.” The American-educated CEO also admires most American CEOs for being intelligent but, noted that most of them are just trying to please their shareholders and the Wall Street. He also looks up to the Japanese for their professionalism but noted that Japanese are always going for consensus that sometimes only slows down the process. But a combination of family business and professional management can work harmoniously, he said. This is what NKG is all about. It is about family and people working to grow together. All things considered, NKG adopts the best practices from all of these business models. In the meantime, all these factors and Shen’s vision are converging to help NKG’s endeavors in the country succeed. NKG is here for the long haul.
Simon ShenChief Executive Officer
NEW KINPO GROUP Taiwanese industrial conglomerate New Kinpo Group (NKG) is a loyal investor in the Philippines. It is the country’s biggest investment from Taiwan, so far. NKG’s affinity to the Philippines is not only due to the oft-repeated Filipino attributes for their English language facility, highly-skilled, happy and friendly workforce, but also because of the business potential the country can bring to the table. Simon Shen, New Kinpo Group CEO, has lofty ambitions for the Philippines, one of only two countries in ASEAN where it is investing, pinning his hopes on the country’s continued economic growth. Shen is setting the stage for the Philippines as a very critical component for its expanding business. New kinpo Founded in Taiwan in 1973, the New Kinpo Group has grown to become one of the biggest industrial companies with estimated combined revenues of $38 billion in 2018. Shen’s group alone with 12 business units is expected to contribute $6.8 billion in revenues this year. NKG has 72 factories employing 108,138. NKG is a global electronic manufacturing services (EMS), original design manufacturing (ODM) and own-branded Group that offers innovative technology, world-class quality products, competitive cost and on-time delivery to its customers around the world. NKG’s EMS and ODM business spans multiple product lines, including external hard disk drives, network-attached storages, TVs, set-top-boxes, all-in-one PCs, laser printers, electronic keyboards and floor-sweeping robotics, smart home appliances, power supplies. NKG also creates new technologies and its own product brands such as 3D printers, innovative smart beauty mirrors, AI humanoid robots, artificial intelligence products, design system-on-chips (SOC), and integrated circuits for cloud computing, etc. In the Philippines, NKG’s investments consist of Cal-Comp Technology (Philippines), Inc., Cal-Comp Precision (Philippines) Inc. and AcBel Polytech (Philippines) Inc. The group first invested in the Philippines in 2000 when its AcBel Polytech Inc. established AcBel Polytech (Philippines). AcBel produces printed circuit board assemblies, switching power supplies, transformer, and cable assemblies in Carmelray Industrial Park II in Calamba, Laguna with 1,500 employees at present. Meantime, NKG has bigger operations in Thailand since 1990 and eventually became a listed company there with revenues of $4.5 billion and employing 18,000 workers producing data storage products, semiconductors, and communication devices, modems and routers, among others. The electronics giant has also big investment in China, but they have encountered problems on rising labor cost and shortage of workers. “I foresee they have more problems in China, so in 2010 we started thinking of maybe doing more,” says Shen. In 2010, NKG decided to expand its presence in southeast Asia. They shortlisted Vietnam and the Philippines. Finally, NKG chose the Philippines, paving the way for new investments. A new subsidiary Cal-Comp Technology (Philippines), Inc., the parent company of Kinpo Electronics (Philippines), Inc. was established in June, 2012. Cal-Comp Technology produces graphic calculators, calculators, electronic keyboards, LEDs, hard disk drive PCBAs, external hard disk drives and various home appliance products. It is located in two locations: Lima Technology Center in Lipa city, Batangas and First Philippine Industrial Park (FPIP) in Sto. Tomas, Batangas. The company has 6,350 employees. Cal-Comp revenue in 2017 reached $210 million, and its estimated revenue in 2018 is expected to hit $500 million. This was followed by Cal-Comp Precision (Philippines), Inc., a subsidiary of Cal-Comp Precision (Thailand) that manufactures plastic injection parts, was established in February, 2016. It is located in First Philippine Industrial Park (FPIP) in Sto. Tomas, Batangas. It currently employs 1,500 people. Notably, NKG’s production in the Philippines are almost all geared for the export market particularly US, Japan, Europe, and China. The Philippine operation, however, is just a miniscule of the entire group’s operation. “But we continue to hire and invest more in the Philippines,” Shen adds noting they expect to have a total of 8 factories in the country by the third quarter of 2019. “Now, we have four entities in the Philippines with around 10,000 workers,” says Shen. It has invested roughly $180 million, but Shen said this could reach $250 million in the next three years. Robotics/AI Under Shen’s leadership, NKG has reached new heights with the acquisition of new plants that house the production of new technologies such as the 3D printer, smart beauty mirror, artificial intelligence products, and a design system-on-chip (SOC) integrated circuits for cloud computing. It has gone into robotics and is expected to forge partnerships with enterprises for the use of their new technologies. It is coming up with a strengthened own brand, as well, beyond its being an OEM manufacturer. For instance, the company is participating in the growing beauty industry by coming up with a smart beauty mirror that can analyze skin types, imperfections and collect data into what could be the world’s first skin data bank. Shen said the Wi-Fi-enabled smart mirror will not store the image of the user nor his or her personal data, just the skin analysis. The mirror, which has to be launched yet, is equipped with a technology that also connects the user to recommendations for products suited for one’s skin and on to the vendor of these beauty products. Product orders for delivery can also be done via the smart mirror. The mirror’s software is upgraded periodically to scale up its capability and applications. This magic mirror is being produced in Thailand. “We are the first one to introduce this product,” says Shen, who finished Public Administration at the National Chengchi University in Taipei. On top of that, NKG is also developing an AI or its smart speaker with special language capability. It can communicate in the Tagalog-English language to suit to the targeted Filipino domestic market. This is on top of its English language capability. NKG’s smart speaker’s unique Tag Lish language will differentiate it from all other smart speakers of other companies that have only the English language capability. “We already have 130 engineers in the Philippines working with our Taiwanese engineers,” adds Shen, who finished his law degree from Whittier Law School in the US and an MBA from the University of Southern California. The team is trying to differentiate the NKG AI with the existing AI of other companies. Both the smart mirror and smart speaker devices are expected to be launched next year. Shen, who became NKG CEO at the height of the global financial crisis in 2008, said he was able to overcome the challenges by coming up with a vision. It was during that difficult transition period that together with his people, they came up with a vision for the company to evolve their manufacturing operation into the new technologies like AI and robotics. Looking back, Shen stressed that a company’s vision is so important to remain afloat, especially for a firm like NKG where returns are not expected in the short term, but for the longer term. He said that pursuing new technologies in robotics, automation and AI are the things they needed to do to stay relevant. It makes the business so dynamic and attune with the times. Shen himself echoes the excitement the new technologies bring, far from the technologies 40 years ago. Already, he sees the mobile phones becoming obsolete. In fact, he cited reports that sales of mobile phones are going down as complementary mobile gadgets are coming up such as 3D projectors where a small box with 3D dimension would just pop up. The visionary Shen foresees a totally new kind of technologies that will replace the traditional way of doing business. He sees NKG’s products leading in these new technologies, further driving growth, and impacting lives. “I really understand that AI will transform lives,” he adds. IPO plans According to Shen, NKG is considering of conducting an IPO in the Philippines. Actually, NKG does not need the money, but the IPO has a bigger purpose. In fact, it is more expensive to conduct an IPO in the Philippines than in Taiwan, but, he believes, it will be worth it. Proceeds from the IPO may also be used for future expansion as they continue to build more factories, but that is not what they are really after. Shen reiterated the company’s image and stature in the country after becoming a public company. This in preparation for their eventual entry in the domestic market as they bring in new innovative products to Filipinos. Once listed at the local stock market, they can be easily recognized by Filipino consumers. Growth of the Philippine economy is still largely consumer driven. “What is more important is our reputation in the Philippines, we consider the domestic market a big potential for us so while we grow the exports market we also try to grow in the domestic market,” he adds. Although the IPO plan is still under discussion, NKG, through Cal-Comp Philippines, intends to bring global consumer technology grounded on AI and robotics to the Philippine market, through increased investment and introduction of new products. NKG aims to increase investments to $250 million in three years from the current $180 million, according to Shen. Company revenues from the Philippines may also hit $500 million this year and $720 million in 2019 from $297 million in 2017. “We continue to grow our manufacturing and export business as well as expand in the local market,” Shen adds as he has been unsatisfied by his group’s $6.8-billion contribution to the overall organization’s coffer. That is why, he is pushing for more growth. Shen expressed confidence that its growth in the Philippines is safely anchored on the good domestic economics and highly-skilled English-speaking workforce, whom he cited for being dedicated as happy people. Besides, he said, the Philippines is quite a good source of engineers, which would be of great help in driving the growth of the company. Bullish As they grow, NKG will not be the only one investing, but suppliers that they tag along to the Philippines. At present, they have 7-8 suppliers that followed them here which are also exporting on their own. Shen also raised the possibility of bringing into the Philippines their 3D printing and design services from Taiwan. If the domestic market is growing, Shen said they can also produce the smart mirror in the Philippines, too. “It was only this year that we thought of selling our own brand because of opportunities of the local market,” he adds. With the strong domestic economy, Shen expects corresponding increase in their business, that means training more people and creating more jobs. He said the Philippines is into that growth pattern of development from agriculture, mining to manufacturing just like how the other industrialized countries started. This is in the same manner that NKG developed their manufacturing capability for the past 10 to 20 years and is now into higher tech knowledge products. “Now is a good chance for the Philippines because some companies are considering to exit China,” he adds noting that most companies in China are now focusing on high tech products for the domestic market because of the high cost of labor for manufacturing. Aside from Asia, NKG has also factories in the US, Mexico and Brazil. Shen noted how governments, particularly India, have become so aggressive in attracting foreign investors because of the need to provide jobs to people. He also cited the government’s efforts to increase supply of power to help reduce the high cost of electricity to help attract foreign investors. “There is no perfect place, but we chose the Philippines because of the highly-skilled and English-speaking Filipinos, who are also very friendly,” says Shen, who has been with the Kinpo group for 17 years already. Suitcase life Shen, who literally lives in a suitcase, tries to be in the Philippines once a week. But he sees to it that he is home in Taipei on weekends. His travels though are strictly business that he is either billeted in a hotel or in the company’s dormitory in their factories in the Philippines. Just too busy for leisure trip that Shen was only able to go out of Manila once when he visited Cebu for a business meeting. Despite his close relationship with the top boss of the Kinpo conglomerate, Shen never takes his role as CEO for granted. A very hands-on boss, Shen reports for work at 7:30 in the morning and leaves office at 7 in the evening to have dinner with his wife, three kids (two daughters 13 and 16 years), and a 7-year old son. His nights are also kept busy with conference calls because of the different time zones of the other factories’ locations. NKG is not all business. In the Philippines, Shen is passionate in improving the lives of the less fortunate Filipinos as the company supports scholarships for kids. Shen, however, would like to do more. He was toying with the idea of spearheading an initiative that will give these kids, not just the formal school setting experience, but exposing them to other cultures and learn from each other. “I believe a lot of Filipino kids would like to learn the Chinese language while other Chinese kids would also like to learn English so why not create a real local setting where they can learn from each other,” says Shen. This 52-year-old businessman was thinking of companies, which always compete for financial bottom lines, adopt this kind of program to expose the less privileged children to a new environment. He reflected that while he brings his kids to summer camps in Europe and the US to expose them to different cultures, views and lifestyle, the kids of low income families are deprived of this privilege. By doing so, these kids will have an open mind and not just think of a world as a small village. Among the local business leaders, Shen looks up to Tessie Sy-Coson, vice-chair of the SM Investments Corp., for her vision. He calls her a “very impressive” and “capable leader.” The American-educated CEO also admires most American CEOs for being intelligent but, noted that most of them are just trying to please their shareholders and the Wall Street. He also looks up to the Japanese for their professionalism but noted that Japanese are always going for consensus that sometimes only slows down the process. But a combination of family business and professional management can work harmoniously, he said. This is what NKG is all about. It is about family and people working to grow together. All things considered, NKG adopts the best practices from all of these business models. In the meantime, all these factors and Shen’s vision are converging to help NKG’s endeavors in the country succeed. NKG is here for the long haul.