Olongapo SubicBay BatangGapo Newscenter

Tuesday, October 28, 2008

Shipbuilders booked until 2013

By.Genivi Factao – Malaya

*Not affected by crisis yet, but orders may soften:

• 37 ship orders keep Hanjin workers working double time.

• Local shipping Industry’s market too small to be affected by crisis.

• Fears of cancelled orders allayed.

The Country’s largest shipbuilding company and local shipbuilders are nor yet feeling the effects of the global crisis, but warned that it could dampen ship orders in the future.

At present, Maritime officials said that the country’s local ship builders are fully booked because of the demand for new buildings in the country (brought by double hull requirements and government’s RORO project) as well as in the global market.

South Korean shipbuilder Hanjin Heavy Industries Corp. Philippines (HHIC-Phil.), is working very hard to be a part with its South Korean counterparts in terms of efficiency and quality of work.

Hanjin workers are working double time to be able to deliver 37 ship orders on time.

Armand Arreza, Subic Bay Metropolitan Authority (SBMA) administrator, said “Hanjin’s capacity is booked until 2013 with 37 ships under order.”

Arreza explained “the present situation (affecting the global market) has no impact in the short term provided that the global economy recovers quickly. A prolonged recession may affect future orders, meaning post 2013 orders.”

There are reports that the global shipping industry frets over the prospect of new building cancellations due to global economic crisis.

“So far we have not received any report that our local shipyards are encountering any problem in terms of cancellation of orders… because definitely before they build, they have secured contracts,” said Col. Primo Rivera, deputy administrator for operations of the Maritime Industry Authority (Marina).

Rivera explained that the global crisis will not hit the country’s shipping industry, as the market is small to be able to feel the effects.

Reports said the global shipping industry will be affected by the crisis, due to anticipated decline in global transport brought by the global economic slow down.

Even the deployment of Filipino seafarers is not spared.

Keiko Niimi, International Labour Organization (ILO) deputy director of Subregional Office for South-East Asia and the Pacific, said; “I have a feeling that on the numbers of seafarers, there will be less demand.”

“But the ones that will be affected initially by this financial crisis, I think, will be management or the skilled level.”

The Magsaysay-owned NMC Container Lines is reducing the capacity of the vessels that it plans to acquire next year.

Roberto Umali, president and chief executive of the Magsaysay Logistics and Transport Group said, earlier they planned to import two 500-TEU capacity container vessels.

But based on their analysis, it will be immaterial considering the slowdown in total cargo volume, due to the slump in both local and international boxed cargoes.

“The 500-TEU capacity vessel is too big now for the local industry even if there is a vacuum in bottoms in the local trade as cargo volume is at a slump,” Umali said.

“Instead, we are looking at about 200- to 35- TEU capacity freighters to leverage more on or fuel consumption and space utilization,” Umali added.

He said in the past couple of months, cargo volume plummet prompting NMC to review its reflecting program to be more responsive at current economic times.

The huge slump in total cargo volume in the third quarter indicates that the shipping industry is headed for tough times.

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