NEW YORK Stock Exchange-listed business process outsourcing (BPO) firm StarTek, Inc. has chosen the Philippines for its first expansion site outside North America, given the country’s low labor cost and competent workers.
The Denver-based company has announced plans to invest at least $5 million for a call center in Makati City, which will employ about 1,100 workers.
In a statement, StarTek President and Chief Executive Officer Larry Jones said the country is an ideal local location because of its "exceptional talent pool and reputation for quality service delivery."
"The Philippine government and the BPO community in the Philippines have made our entry into this market exceptionally smooth and welcoming," he added.
Mr. Jones said the company chose the country for its large university-educated talent pool, reliable telecommunications infrastructure and cost-effective operations compared with other countries in the region.
In a telephone interview on Friday, StarTek Senior Vice-President Mary Beth Leosch said the country’s "cost structure is right for us."
StarTek offers customer care, customer acquisition and receivables management functions for some of the world’s largest organizations. The company will be building its four-storey facility in a 7,200-hectare site in Makati.
Ms. Leosch said they would be applying with the Philippine Economic Zone Authority (PEZA) for tax incentives given to pioneer companies, which must put up a minimum investment of $5 million.
Under PEZA rules, a company that has obtained pioneer status is exempted from income taxes for six years.
The company, meanwhile, also hinted of further expansion within the country, citing continuing capacity growth.
"As the global communications industry continues to expand, StarTek is [expecting] strong demand for services delivered from both North America and the Philippines because of our positioning as a quality provider," Mr. Jones said. "Many of our clients and prospects are asking us for more capacity as soon as we can provide it," he added.
The company will undertake a number of recruitment initiatives in the coming months, in time for its facility’s opening in the fourth quarter. The country’s BPO industry is expected to grow by more than a third this year into a $7-billion industry. It is also expected to employ up to half-a-million workers from around 300,000 last year.