BIRTH  OF  GIANT  SHIPBUILDING:  HANJIN  IN  RP

SUBIC BAY,
MAY 31, 2007
 (MALAYA) BY GENIVI FACTAO - The Hanjin shipbuilding facility along Subic Bay is an awesome sight. About three to five mountains had been leveled to accommodate the shipyard. This early, it is seeking approval to expand its site.

Along the coast, adjacent to its steel cutting facility, platforms to hold the skeleton of a containership, start to rise.

We were aboard an SBMA patrol boat, and as we circle Subic Bay, we can see the great potential of Subic as an international service and logistic center in Asia.

This must be the way Hong Kong and Singapore looked before it was über developed, or even Cebu in the 1980s.

Across Hanjin is the Subic container port which can easily accommodate 300,000 TEUs.

A passenger processing facility is ready for the time cruise ships will dock in the free port.

Subic bay Metropolitan Authority (SBMA) chairman Feliciano Salonga is very confident the Philippine shipbuilding industry will be a major pillar of the economy, thanks to Hanjin Heavy Industries Corp. (HHIC)-Philippines, owner and operator of one of the biggest shipbuilding facilities in the Asia-Pacific region.

Hanjin is not the first foreign shipbuilder to come to the Philippines. Keppel and Tsuneishi were first.

"In boxing, Hanjin is heavy weight class, Tsuneishi is in the featherweight class," Salonga said.

Previous to that, there are the shipbuilders in Malabon and Navotas and the builders of yachts and small boats also in Subic.

"We are a maritime country. We supply 40 percent of international ship crew, 15 percent of which are officers", Salonga said.

We have schools here in Subic and Bataan to train merchant marines, he added.

"I am very upbeat about Hanjin since when fully operational, they can employ as many as 30,000 workers."

The SBMA chairman said Subic will be the center of shipbuilding, ship repair, education and training, services and logistics.

"Subic is a freeport. We have incentives like tax, facilitation, and they can fully own their investment," he said.

Subic also have seven patrol boats for security and another one that can handle oil spills.

Hanjin has committed to invest $1 billion, which it can double depending on the space that it can get.

At present, Hanjin is making use of 282 hectares of the Redondo peninsula. Its expansion needs up to 300 hectares all in all.

The government collects about $3.50 per sq.m. as rent. The chairman added that the rates are renegotiated. SBMA calculates it will earn $10 million from rental for a 50-year lease.

Besides the rent, the government collects 5 percent as corporate income tax and export taxes. It is expected that it can bring in close to $2 to $3.5 billion worth of export industries.

More than taxes and rent, Salonga pointed out, is the employment Hanjin can generate. Hanjin will need about 30,000 workers in the shipyard.

They will be employing professionals such as naval architects and marine engineer, also direct line workers like ship fitters, welders, electricians etc.

He explained that 40 percent of the total invest cost of Hanjin goes to the economy, spent in labor, housing, and food.

"Generally 40 percent of the cost is labor, and labor is what we provide in the partnership. Material and technology is 60 percent, so it is big value added for the domestic market," he explained.

Salonga said that Hanjin had order book of $3 billion, which takes several years to finish. It already accepted orders for 12 ships at $60 million each from three different companies. First in the production line is for a French company represented by its president, Krevork Hekimian.

Hanjin has completed the first phase of construction in Subic, which enables them to start cutting the steel for the block construction.

Hanjin shipyard, can fabricate 60 ships of different sizes and types in a year. The first steel cutting for the construction of a new 4,300 TEU container ship was conducted in March.

Already lined-up for production are six units of 4,300 TEUs container ships to be delivered to Diorxy Maritime Corp. in Greece in 2009. The second production line will be comprised six units of 4,300 TEU ships intended for NSC Schiffartsgeselhaft of Germany.

Salonga narrated that Hanjin has been operating in the country for more than 20 years as Hanhill contractor, engaged in civil works.

"They know our culture for me they are the ideal locator. Hanjin pays all its bills on time," he said.

Hanjin will take care of expatriates from Korea while they give support for the housing of Filipino workers.

Hanjin will invest P37.4 million to construct a condominium-hotel in a three-hectare lot inside the Ilanin Forest East area.

Last February, HHIC-Philippines opened the P240-million Hanjin Skills Development Center (HSDC), the world’s largest single shipbuilding training center that could accommodate 500 Filipino trainees per batch.

"The first phase of the Hanjin Skills Development Center can initially accommodate a total of 500 trainees; while Phase 2, when completed in May or June this year, can expand from 1,000 to 1,200 trainees per batch," HHIC-Phils. and HHIC Regional Director Jeong Sup Shim said.

The government allocated more than P20 million to relocate informal settlers in Redondo.

"If we don’t do anything more except make sure that Hanjin and Subic shipyard are operating we have justified our mandate. That’s more than enough contribution to the economy," Salonga ended.


Chief News Editor: Sol Jose Vanzi

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