Peering off across Subic Bay, one will notice a large construction site where monolithic blue buildings exist. Some of the local construction laborers in the Subic area can also be seen making the cross over to the other side of Subic Bay every morning to take advantage of the work opportunity. This is actually a major shipyard. Enter Hanjin.
The Hanjin Group is a Korean conglomerate, or Chaebol by Hanjin Group. The group is a holding company that includes a shipping company, Hanjin Shipping (KSE: 000700) (including Hanjin Logistics), Hanjin Transportation (KSE: 002320), Korea Airport Service (KSE: 005430), Meritz Investment Bank (KSE: 012420), and Korean Air (KAL) (KSE: 003490), which was acquired in 1969. With its majority interest in the Senator Lines, Hanjin-Senator is the seventh largest container transportation and shipping company in the world.
As part of the "Korean Invasion" in the Philippines, or the inbound traffic of Koreans into the country, Hanjin Heavy Industries and Construction (KSE: 003480), a South Korean shipbuilder, has taken part by its decision to invest $ 721 million (700 billion won) in constructing a shipyard in the Philippines at Subic Bay Freeport Zone. The investment will cover about 10 years from March 2006, the company said in a filing to the stock exchange, adding it aimed to make the first vessel delivery from the shipyard in June 2008.
Hanjin Heavy hopes to use the Subic shipyard as a base for overseas operations, said Woo Gun-Kon, spokesman for Hanjin Heavy. "The Subic shipyards will have facilities to produce liquefied natural gas carriers and other large ships as well as plants such as steel bridges," he said.
The company has already won a 250-million-dollar order from France's CMA CGM to build four 4,300-metric-ton container ships in Subic from 2007, he said.
The shipyard in the Philippines is part of efforts by Hanjin Heavy to compete with Hyundai Heavy Industries, the world's largest shipbuilder, and other domestic rivals, which swept nearly 40 percent of global orders last year.
"The Subic shipyard will be far bigger than our current one," another Hanjin Heavy official said. "We are in talks with the French firm on business ties including its participation in construction of the Subic shipyard," he added.
President Gloria Macapagal Arroyo was ecstatic when Hanjin, South Korea’s fifth-largest shipbuilder, finally signed the deal with Subic Bay Metropolitan Authority (SBMA). “The good news is that the agreement will result in 15,000 new jobs for workers here in Subic. We have been preparing for this investment for a long time,” she said.
Hanjin earlier looked over an area of 200 to 300 hectares at Subic's Redondo Peninsula where a concrete graving structure is already in place for the planned facility. Shell Exploration B.V. used the same area when it assembled the state-of-the-art production platform for the Malampaya natural gas field.
In the meantime, Tsuneishi’s Cebu joint venture with Aboitiz Corp., Tsuneishi Heavy Industries (Cebu) Inc., is aggressively expanding. It completed this month the civil works and a big block fabrication facility for car carriers under the third phase of its expansion program.
Japanese officials of the Tsuneishi Group are bullish on their operations at the West Cebu Industrial Park in Buanoy, Balamban in the western part of Cebu province. Their shipbuilding business is booming and if company plans for a third slipway push through, Cebu and the Philippines will soon host one of the five biggest dockyards in the world.
Skeptics may not be easily convinced by this development but the shipbuilding sector is poised to become one of the major industries in the Philippines after Hanjin Heavy Industries and Construction Co. formally agreed to put up a shipbuilding facility in Subic Freeport. Tsuneishi’s third slipway and Hanjin’s $ 721 million investment in Subic’s Redondo Peninsula, will easily make the Philippines the world’s fourth biggest shipbuilder after Korea, Japan and China.
References: Wikipedia, Manila Standard Today, Inquirer