Olongapo SubicBay BatangGapo Newscenter

Wednesday, October 04, 2006

Good and bad news in the shipbuilding industry!

INSIDE CEBU By Bobit S. Avila
The Philippine Star

There is no doubt that foreign investments in the Philippines are coming in good numbers and President Gloria Macapagal-Arroyo (GMA) announced last week that the Hanjin shipyard now under construction at the Redondo Peninsula in Subic Bay Freeport would be able to deliver its first container ship in March 2007, with 12 vessels worth $60 million already on order. With Hanjin Heavy Industries and Construction Corp. building its facilities on a 480-hectare area, you can bet that soon the Philippines will become one of the top shipbuilders in the whole world.

Actually, the Philippines appeared on the radar screen as far as shipbuilding is concerned with the entry of the Tsuneishi Heavy Industries Cebu Inc. (THICI) in Balamban, Cebu way back in 1995. Tsuneishi has been building 58,000 deadweight ton bulk carriers and dubbed the sixth biggest shipyard in the world. Today, Tsuneishi employs some 2,000 highly skilled workers, among the best welders in this country. THICI is a joint venture between Tsuneishi Corp. of Japan and Aboitiz and Co. What is remarkable in this joint venture is that Tsuneishi, with its Cebuano workers and Japanese top supervisors, crank out a brand new vessel every three months from scratch!

The good news from Tsuneishi is that it has committed to invest $100 million (around P5 billion) for the expansion of its present shipyard into another 86 hectares from its present 40 hectares. This expansion program would increase or double THICI production from 14 vessels to 24 vessels per year. THICI director Roberto Aboitiz predicts that sales in ships would hit $1 billion a year from this expansion.

That’s the good news about the shipbuilding industry in this country. Now for the bad news! During last Friday’s full council meeting of the Regional Development Council (RDC-7), an acute shortage of skilled workers was discussed, especially with regards to the shipbuilding industry. Tsuneishi Heavy Industries has been experiencing the piracy of its skilled workers by foreign shipyards. Just imagine when Hanjin Heavy Industries starts to operate and it would compound this problem three-fold.

THICI director Roberto Aboitiz bewailed the reality that it takes around six years to train a good engineer and thousands of pesos more to train ship welders, yet despite this training and contracts signed, workers disappear without honoring their commitments. Thus, Cebu provincial board member Agnes Magpale is proposing an ordinance regulating workers and helping them comply with their contracts. Magpale believes that this problem is serious enough to discourage more investors to the Philippines. However, this problem isn’t only being experienced in the shipbuilding industry but in other industries as well.


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