UPS rules out exit from Clark even as it plans China move

UPS has signed an agreement with the Chinese government on the establishment of an international air hub at the Pudong International Airport in 2007.

A ranking UPS official, however, said the company will not abandon its operations in Clark, Pampanga in favor of China.

“Clark is very important for us. We will continue to do business there. Our intra-Asia hub there is seen to complement the planned international hub in China,” UPS Chief Operating Officer John Beystehner said on the sidelines of a technology summit here.

He said the location of UPS’ hub in Pampanga, which opened in 2002, allows the company to connect to major business centers in the region within a four-hour flight.

However, the planned global facility in China will handle international operations and take advantage of the fast-growing Chinese market.

“Shanghai and East China are key markets for UPS China and the importance of the local market coupled with the world-class facilities at the Pudong International Airport make Shanghai a natural location for our hub,” Mr. Beystehner said.

The hub will sit on a 5,000-square meter lot, expandable to at least 10,000 square meters. Its major competitor Federal Express earlier announced plans to transfer its operations to China from Subic, Olongapo by 2008, saying that it needs to expand capacity.

Asked about the possibility of UPS doing a similar move as Fedex, Mr. Beystehner said this is unlikely because UPS is satisfied with the runway in Clark Field.

“I understand that with the Subic runway, there is a problem with length. We already looked at that before,” he said. On the other hand, he said the airstrip in Clark suits UPS’ requirements.

He said UPS recently infused an additional USD1.4 million in investments to expand its Pampanga hub. “The liberal air policies in place in the Philippines allow us to operate efficiently, and the Philippine government and the Clark Development Corp. have extended great support to UPS.”