Ayala’s IMI: Making its mark in the global arena

MANILA, Philippines - Ayala-led electronics manufacturing firm Integrated Micro-Electronics Inc. (IMI) does not mind staying out of the limelight as long as business continues to be very good. Being in the electronics manufacturing services (EMS), power semiconductor assembly and tests services industry, after all, is not something that many people can easily appreciate and understand.

“A lot of people misconstrue that IMI is purely a semiconductor company but we are not, we are an electronic manufacturing service company. The difference there is that the semiconductor part is the one that builds the integrated circuits, the IC, the chips. We’re the ones who use those chips and produce the product,” said IMI president and chief executive officer Arthur Tan in an interview with The STAR.

Tan said semiconductors account for only eight percent of the firm’s total business.

“So in essence it’s also correct, we are a semiconductor company except that it’s only eight percent of our business. Ninety two percent is building products,” he said.

IMI, as a company, is currently far from being as popular here in the country as the other Ayala-led businesses like Ayala Land Inc., Globe Telecom Inc., Bank of the Philippine Islands, and Manila Water Co. But unknown to many, IMI’s business is as close to consumers as it can be.

“The other entities like banking, malls, and water, their business are B to C or business to consumer. IMI is a B to B business. That’s why it’s not readily something that the consumer is aware of. They’re aware of the products that we have built when they buy the brand. But they really are not exposed to the people that build the products for the brand,” Tan said.

Since its inception in 1980 as a small and medium enterprise (SME) with only 100 people, IMI has silently etched its mark both here and abroad.

IMI currently ranks 21st on the latest list of top 50 EMS providers in the world after recording a strong $745 million revenues last year.

The firm also ranks 8th on the list of the top 10 EMS players in the automotive market based on 2013 EMS revenues derived from the automotive segment.

As of the first half of the year, the firm posted $431 million in consolidated revenues, a 23 percent increase from $350.5 million the same period in 2013. First half net income amounted to $11.3 million, five times more than 2013’s first half profit of $2.1 million.

Aside from the Philippines, IMI to date is also present in six other countries including China, Singapore, Mexico, Bulgaria, Czech Republic, and US. It operates 14 manufacturing plants in all seven countries, five of which are in the Philippines.

“So a very few people know IMI especially here in the Philippines. And very few people know that we’re a very large global company operating in seven countries. IMI in Bulgaria is in fact the largest electronic manufacturing company in that country and it’s a Filipino-based company,” Tan proudly said.

“Everybody talks about Filipinos moving out to different countries and here we are, a Filipino company hiring and providing employment for Czechs, for Bulgarians, for Japanese. So this is a Filipino company providing employment so we should be proud,” he added.

Tan, who joined the Ayala Group 21 years ago, can be considered as the man behind the machines as he catapulted IMI to the global landscape.

“IMI was purely a Philippine operation when I entered so I would think that what I brought was just the ability for the company to become a global company. I provided the vision but I didn’t do it alone because there are a lot of people that put their hearts and blood and years into this to make this happen. It just so happened that I had a group of people that has the right capabilities that was able to execute and make this happen,” Tan said.

As it celebrates its 34th year in operations this year, the company continues to grow and develop new business models as well as high value-add services that fit the dynamic markets it serves.

By being a global company, Tan said IMI’s business does not easily take a hit once something negative happens in one of the countries where it currently operates.

“The advantage that IMI is we’re not directly affected by what happens in the Philippines, but we’re affected by what happens on a global basis. We’re able to take advantage of serving other markets, but at the same time we’re also affected by what happens there.The good news is that if one market goes down, we still have other markets to serve,” Tan said.

At present, the company’s comprehensive capabilities and global manufacturing presence allow it to take on specific outsourcing needs of various markets. IMI currently serves diversified markets that include those in the automotive, industrial, medical, telecommunications infrastructure, storage device, and consumer electronics industries.

The firm’s biggest market to date is the automotive sector accounting for 37 percent, followed by telecom at 18 percent, industrial at 15 percent, consumer at 14 percent, computing at five percent and medical at three percent.

“The global brands that we deal with, they serve the world. And for them, it requires a partner that will be able to do it regionally. For them, that is us, IMI,” Tan said.