Hanjin Subic to start building ultralarge vessels

SUBIC BAY FREE PORT—South Korean shipbuilder Hanjin Heavy Industries and Construction Philippines Inc. (HHIC) is taking the shipbuilding industry here to the next level—the construction of ultra-large oil tankers and Capesize-type bulk carriers.

Company officials said in a statement that the firm has signed a contract with Taiwanese shipping company Hsin Chien Marine Co. Ltd. for the construction of two 180,000-ton Capesize bulk carrier vessels that it agreed to deliver starting September next year.

Just last month HHIC delivered to a Turkish firm the 114,000-deadweight ton MT Leyla K, the first oil tanker to be built in this free port.

The firm also completed recently the APL Bahrain, which has a capacity of 4,330 twenty-foot-equivalent units, and said to be the largest vessel to ever dock in the country.

The Capesize contract signals yet another milestone for Hanjin, which completed the expansion of its $1.7-billion shipyard at Subic’s Redondo Peninsula last year.

Capesize vessels, which typically weigh around 175,000 deadweight tons (DWT), are considered the biggest among dry- bulk carriers and because of their size, are incapable of passing through the Panama or Suez canals. Instead, they are forced to transit via the Cape of Good Hope in South Africa or Cape Horn in South America, hence their classification.

The production of Capesize vessels in Subic followed the firm’s program to diversify vessel type from high-profit vessels to high-valued, or ultra-large ships, following the expansion of its Subic facility from a capacity of 220,000 tons a year to 450,000 tons.

Before this, Hanjin could not compete in the ultra-large carrier class against the top three shipbuilders Hyundai Heavy Industries, Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering, due to limited space at its Yeongdo shipyard in Busan, Korea.

Last year, as it was still completing the expansion project, Hanjin already announced signing a contract to deliver two Subic-built very large crude containers by June 2011.

Both vessels will weigh 320,000-DWT and measure 333 meters long, 60 meters wide and 30.5 meters deep.

Meanwhile, Subic Bay Metropolitan Authority (SBMA) Administrator Armand Arreza said Hanjin has become the fourth-biggest shipbuilder in the world because of its highly skilled Filipino workers in the Subic shipyard.

He added that Subic’s well-trained work force, combined with Hanjin’s state-of-the-art technology and highly efficient shipbuilding processes, has resulted in a cost-efficient shipbuilding business here.

“What many foreign investors like about Subic is the competitive work force,” Arreza said. “The Philippine labor force is more competitive than those in other Asian countries. And here in Subic Bay, we take pride in our talented and high-quality workers.”

Arreza said local workers have “high-quality motor and technical skills, are quick learners and hard working, and they put into practice what they learn in trainings.”

As of December 2009, shipbuilding and marine-related businesses in this free port accounted for some 25,186 workers. About 68 percent or 17,000 of these are employed by HHIC and its subcontractors.

Arreza said the highly skilled Filipino craftsmen enabled Hanjin to expand its operations and start producing 10,000-TEU and 4,000-TEU container ships, oil tankers and bulk carriers. He added that the firm now eyes production of 260,000-ton Q-Max Class coal-bed methane-liquefied natural-gas carriers, drill ships, floating production storage and off-loading and marine plants

He also said that with the entry of labor-intensive firms like Hanjin, the Subic Bay free port started realizing its mission to create more jobs and alleviate poverty among Filipinos, especially in the Central Luzon region. Written by Henry Empeño / Correspondent businessmirror.com.ph