Hanjin allowed to continue ship building operations

CAGAYAN DE ORO CITY, Philippines - Local executives of the two towns hosting a $2-billion shipyard project of Hanjin Heavy Industries and Construction Corp. in Misamis Oriental have agreed to withdraw halt orders on the Korean firm’s operations.

A statement sent to BusinessWorld on Wednesday by the regional office of the Interior and Local Government department said Mayors Paulino Y. Emano of Tagoloan and Juliette T. Uy of Villanueva had lifted the stoppage order on the operation of Hanjin inside the Philippine Veterans Investment Development Corp. (Phividec) industrial estate.

President Gloria Macapagal-Arroyo, during her visit to this city on Wednesday, spoke with the two mayors and ordered Misamis Oriental Governor Oscar S. Moreno to head task force Hanjin Mindanao, which should find ways to resolve the issue.

President Arroyo listens as officials of South Korea-based Hanjin Heavy Industries and Construction Corporation explains to her points about the Koreans’ $1-billion investment during her visit to the Hanjin shipbuilding construction site at the Subic Bay Freeport in this file photo dated Sept. 27, 2006. — BW File Photo

Undersecretary Renato L. Ebarle of the Presidential Management Staff, Interior and Local Government Regional Director Quirino M. Libunao and Phividec Administrator Ninfa A. Albania had been speaking with the mayors for days to stop their opposition to the Hanjin project.

Hanjin was reportedly thinking of pulling out its project — a major investment accomplishment of the Arroyo administration — due to problems with the host communities.

Since March, residents of the two towns have been complaining that the company and its contractors had failed to make some good promises on relocation, as well as on the hiring of locals.

During a public consultation in late March, Eduardo Rubic, Hanjin Heavy Industries Corp. project coordinator, assured the towns of Villanueva and Tagoloan that these would be prioritized for hiring.

But he also said not all applicants who are residents of the two towns would all be accepted by the company.

"Applicants will have to be chosen properly and they will pass through standard procedures. If the employer is dissatisfied with the skills and qualifications of the applicants, then they won’t be accepted," Mr. Rubic told participants during a dialogue with community leaders.

The regional office of the Interior and Local Government department said both mayors had agreed to allow Hanjin to continue operating provided it complies with agreements it had agreed to, including the relocation of affected families and the employment of local workers.

Mario B. Sumalinog, team leader of MJ Consulting Services, a firm subcontracted by Hanjin, said the shipyard has assembly and repair bays to cater to large ships of up to 120,000 tons and other marine vessels, a power station, fabrication facilities, warehouse and structures for housing and offices.

The complex will be built in five years and, once completed, will have the capacity to build 12 large ocean-going ships every year under a state-of-the-art automated system.

The total area to be used by the Korean firm is estimated to be 500 hectares.

Aside from its shipyard site, a training center and a staff house for Korean nationals will also be put up, which are estimated to require at least 16 more hectares. - with a report from Geefe P. Alba, BusinessWorld

Shipyard to inject P4.6 billion to local economy

CAGAYAN DE ORO CITY,South Korea's Hanjin Heavy Industries needs 40,000 workers over the next few years to construct and operate its proposed multi-billion shipyard in Tagoloan, Misamis Oriental.

Once in operation, the Hanjin is expected to inject into the local economy at least P4.6 billion per year in terms of salaries and wages for its employees, General Manager Jeong Sup Shim said.

Vice Mayor Vicente Emano quoted Hanjin officials as having said that the Korean shipyard firm prefers women as welders more than their male counterpart.

They (Hanjin officials) prefer women since they have observed that women are more careful in handling welding jobs than men, Emano said.

He said government line agencies here led by the Technical Education Skills and Development Authority (TESDA) are now training skilled workers to fill up much needed vacancies once the shipyard operates.

Emano said that some 50, first batch welders, are now reportedly training in Hanjin's facility in Subic, Zambales.

Pacifico Pupos, Jr., presidential assistant for Northern Mindanao, said that the Korean shipyard company wants untrained applicants, especially welders, so that they can be properly trained the Hanjin standard."

Aside from welders, plumbers and electricians are also needed in the shipyard complex, Pupos said. He said Hanjin will soon open recruitment offices in Cagayan de Oro.

The proposed Hanjin shipyard located at the Phivedec Industrial Estates (PIA) 441-hectare lot is the firm's second in the country but is considered the fourth largest shipyard worldwide.

The first phase of its Phividec operations will fabricate pipes and light bridges with a maximum capacity of 80,000 tons a year when it start operation next year.

The facility's capacity would expand to 830,000 tons in the next 15 years. By then, the shipyard is expected to start constructing giant ocean-going cargo and container ships.

When completed in 2017, the new shipyard complex will have a capacity of 830,000 tons per year. Hanjin has an existing multi-billion dollar shipyard in Subic , PIA officials said.

This year, Hanjin expects to finish most the phases of its first US$ billion shipyard complex at the 349-hectare lot at the Subic Bay Freeport zone. The Subic dockyard complex is scheduled for completion by 2011.

Jeong said Hanjin decided to build and expand its facilities in Misamis Orientals economic zone at the Phivedec area to enable it to avail of income tax holidays and import duty free equipment.

He said their company decided to expand overseas due to capacity constraints in Korea. Hanjin is scheduled to deliver 33 medium-sized container vessels worth several billion US dollars, in the next two years and build 82 large-sized ships from 2009 to 2011 at its Philippine facilities. (PNA)

Firm builds world’s 4th largest shipyard in Misamis Oriental

CAGAYAN DE ORO CITY, Philippines -- The construction of what its South Korean builders claim will be the world’s fourth largest shipyard facility has started in Misamis Oriental.

The $2-billion facility is expected to employ about 45,000 people -- including engineers, welders, fabricators and administrative personnel -- within the next three years, when the facility is expected to become fully operational, according to Hanjin Heavy Industries and Construction Co. Ltd. and Philippine officials.

The facility is being built in an area covering 441.8 hectares at the Phividec Industrial Estate located in the towns of Villanueva and Tagoloan, some 30 kilometers east of this city.

Hanjin said the construction of the shipyard would put the Philippines on the list of countries with the largest shipyard facilities, after South Korea, Japan and China.

But there will be human costs.

More than 200 families in two villages in Villanueva town will have to be relocated to give way to the shipyard, according to project officials.

Other coastal villages in Tagoloan town will also be affected.

Yun So Kim, Hanjin administrative manager, said the company was on track with the project’s timetable and that it expected to finish the first phase within the second half of the year.

He said the completion of the first phase would enable Hanjin to produce 80,000 tons a year of outfittings and pipes, among other items.

Kim said the civil works started after the signing of a memorandum of understanding between Hanjin and the Phividec Industrial Authority (PIA) in Cagayan de Oro in January. President Gloria Macapagal-Arroyo witnessed the signing.

It would be Hanjin’s second shipbuilding complex in the country.

Hanjin also operates a shipyard in Zambales which, as of last October, had a total direct hire of nearly 5,000 people, according to the Subic Bay Metropolitan Authority.

The Hanjin shipyard in Zambales recently figured in the news when at least five workers died in two work-related accidents within the facility in a span of three months.

The SBMA found Hanjin guilty of violating at least seven safety standards and ordered the company to comply with international safety standards.

Kim said that aside from civil works aspect, Hanjin, together with PIA, began public consultations in areas that would be affected by the construction of the Misamis Oriental facility.

During the consultations, communities voiced concern over relocation and livelihood issues, citing the failure of the PIA in the past to address their needs.

The PIA is the government agency mandated to administer the 3,000-hectare Phividec estate and takes charge of the relocation of the affected communities.

In a recent consultation with residents of the village of Tambobong in Villanueva, village officials criticized the PIA for not keeping commitments it made to families displaced by projects within the estate.

Some residents also said their crops were bulldozed without prior notice.

“We admit that the lands where our houses are standing are not ours. We are just occupants here. But what we only ask is the assurance that we will be justly compensated with the cost of building our houses, including the crops that we’ve planted,” village leader Delilah Abellanosa said.

Hanjin said it assured residents they would be compensated fairly for the crop damage as a result of the shipyard’s construction.

Kim said that for Phase 1 from 2008 to 2009, Hanjin would be investing $720 million for the purchase of shipbuilding facilities from Aveva and other foreign manufacturers.

“We started importing materials from Korea and other countries last January. We also use local materials but these are more expensive,” Kim said.

He said the $2 billion that Hanjin was sinking in the project was the company’s biggest investment yet outside of South Korea.

Kim said Hanjin was also focusing on developing the skills of its newly hired engineers so they could meet the company’s standards in shipbuilding.

“We already have a training center within the Hanjin compound (in Phividec) where all those who will be hired will undergo skills development,” Kim said.

Hanjin has said it is trying to thresh out land issues that delayed the project last year, such as the issue with the Jacinto group of companies, which previously owned part of the 441.8 hectares targeted for the shipyard.