Author Topic: Putting the "Philippines as the #4 largest shipbuilder" label into perspective  (Read 4962 times)

adroth

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The call for moderation on the matter of local naval ship manufacturing, particularly in the Frigate Acquisition Project included provisions for local production thread, was in response to various groups who frequently point out that the Philippines is "The 4th largest shipbuilder in the world".

If we have such an elevated status, if we are so much larger than other countries that have already been building their own naval vessels -- such as Indonesia and India -- then we are, in fact, already long overdue for making OUR OWN warships.

Sentiments like the following are typical.

Quote
We are the 4th largest shipbuilder in the world but building a warship is not in the vocabulary of our officials. .

Quote
We can build even aircraft carrier if we have the budget...

The base assertion can be summarized as: "We already can, it's just that we're just not pouring in the money".

It is a sentiment that ignores the nature of the Philippine shipbuilding industry, and the very real challenges laid out in the Frigate production thread.

Sadly . . . the carefully crafted automatic rebuttals to this triumphalism went the way of the old forum. So now, we must re-build that database, and help the nation understand what it REALLY means to be the "4th largest" given the ACTUAL state of the industry.

Time to rebuild that discussion.
« Last Edit: January 02, 2019, 02:06:20 AM by adroth »

adroth

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The following article is useful in that it achieve two key things:

1. It affirms our status as an up-and-coming star in the global shipbuilding scene

2. It highlights how that rise was actually made possible . . . by foreign companies filling the order books of foreign customers while building in the Philippines to leverage PH labor.


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Philippines emerging as shipbuilding hub
YUTA TSUNASHIMA, Nikkei staff writer
October 23, 2014 00:00 JST

https://asia.nikkei.com/Economy/Philippines-emerging-as-shipbuilding-hub

TOKYO -- The Philippines is quickly becoming a global shipbuilding hub by using the skills and resources of foreign players. In 2010, the country surpassed its European rivals and has since become the fourth-biggest shipbuilding nation, after China, South Korea and Japan.

Tsuneishi Heavy Industries, a subsidiary of Japan's Tsuneishi Holdings in Fukuyama, Hiroshima Prefecture, is one of the foreign companies building ships in the Philippines. THI currently operates a large dockyard on the west coast of Cebu Island, about a two-hour drive from the east coast and its airport and resort hotels.

The shipyard takes up 1.47 million sq. meters, about three times the size of the Tsuneishi group's shipyard in Fukuyama. Roughly 13,000 employees, including subcontractors, work at the establishment, which also has a 450-meter dock for building vessels.

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The biggest players

The Philippines-based operation has become one of Tsuneishi's major production bases. This year, THI expects to build a total of 20 ships, mainly bulk carriers for iron ore. This means THI makes nearly 40% of the ships built at Tsuneishi group production bases, including those in Japan and in Zhoushan, Zhejiang Province, China. THI President Hitoshi Kono said the unit hopes to grow further, and targets building 30 ships per year by 2018.

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According to the U.S. research company IHS, in 2013, Filipino shipbuilders constructed a total of about 1.33 million tons of ships, 50.8% of which was built by THI. The figure covered only ships with gross tonnages of 100 or more.

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« Last Edit: April 16, 2018, 03:25:59 PM by adroth »

adroth

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The largest players in the Philippine shipbuilding industry are actually foreign players that cater to the foreign market.


$5 Billion maritime business in the Philippines
Mark Lerche, Head of Danish Marine Group
26.05.2015

https://www.dk-export.dk/nyt-og-presse/nyheder/$5-billion-maritime-business-in-the-philippines/

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Four major players

There are four major shipbuilding companies in the Philippines, which mainly builds ships of larger tonnage capacities such as bulk carriers, container ships, and passenger ferries. These are Hanjin, Tsuneishi, Keppel and Herma.

“Hanjin’s construction of a 180,000-DWT commercial ship in 2013 was the starting signal to the international industry that the Philippines is growing to become a future force in the maritime sector,” Jan Top Christensen argues.

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« Last Edit: April 16, 2018, 03:37:06 PM by adroth »

firstknight

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There is also a fifth player in Austal who took over the business of FB Marine

adroth

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Food for thought when talking about the Philippine shipbuilding industry.


http://industry.gov.ph/wp-content/uploads/2017/08/The-Philippines-in-the-Shipbuilding-Global-Value-Chain.pdf

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Global Shipbuilding Global Value Chain

In 2016, there were 1,664 ships delivered, with a total weight of approximately 66 million gross tons (GT), and a total value of $80.2 billion. Exports in 2015 were approximately $117 billion. There were approximately 730 active shipyards in 2015, however only 240 received an order in that year, and nearly 50% of output is consistently produced by the largest 20-24 yards. The global industry is currently in a state of overcapacity and the average age of the global fleet is young, however there will still be demand for newbuilds, as well as conversions and repairs, particularly due to increasing environmental regulations.

There are four key aspects of the shipbuilding GVC that should be highlighted:

• Final assembly is concentrated in a few countries and offshore production is uncommon: A unique feature of the shipbuilding industry is that three countries
(China, Korea and Japan) account for over 90% of production based on GTs. While some shipbuilders have set up shipyards in foreign countries, offshoring has not been a
significant trend in this industry like many other GVCs.

• There are two main segments: commercial shipbuilding (focused on transporting) and the offshore segment (activities that occur at sea; primarily related to oil). Within
each there is a wide mix of vessel types; all share some common materials and equipment, but several inputs depend on the intended purpose of the vessel. Global
market share (in terms of producing countries and vessel types) also varies depending on the unit of measurement (volume/weight, value, number of vessels, and production versus exports). Furthermore, shipbuilders often specialize in one or a few ship types.

• National/domestic support has, and continues to play, a key role in the development of the shipbuilding industry in a country: Support is in the form of
domestic demand (through government purchases, domestically-owned shipping companies or local content requirements) and in providing financial assistance through
government-backed loans or state-ownership.

• Safety and environmental standards are high and play a significant role for oceangoing vessels. These standards are mandated for ships sailing in international
waters, however vessels used in domestic waterways are only subject to national requirements. The ability to meet international standards can be a significant barrier to
entry for new shipyards.

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For export, the Philippines primarily produces bulk carriers and containerships as well as some tankers. Exports are driven by two large foreign-owned shipbuilders (Hanjin and Tsuneishi). Two other notable foreign owned firms are Austal (small aluminum passenger/mixed-use ships) and Keppel (mostly repair). Domestic shipyards primarily engage in ship repair for domestic ships, which accounts for 90% of domestic shipyard revenue. There are approximately 17 large or medium-sized domestic shipyards, 90+ smaller yards, as well as service and afloat contractors. Domestic yards that are engaged in shipbuilding build small vessels for domestic or internal demand (i.e., fishing, government, some passenger/cargo).

The industry employs 48,000 workers and is geographically concentrated in the greater Manila area and Cebu. While domestic firms account for the largest share of the industry based on the number yards (95%), the two largest foreign-owned exporters account for nearly all exports, 75% of employment, and 97% of revenue. In both segments, backward linkages to materials and equipment are nascent, and nearly all inputs are imported directly or via distributors.

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« Last Edit: April 17, 2018, 05:43:15 AM by adroth »


adroth

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This label is in jeopardy

Korean shipbuilder’s Hanjin Philippines files for rehab amid debt burden
Published January 10, 2019 4:35pm

https://www.gmanetwork.com/news/money/companies/680971/korean-shipbuilder-s-hanjin-philippines-files-for-rehab-amid-debt-burden/story/?fbclid=IwAR34cGghSQJEK1UBpiH-kt7OnmMvLeyh5X2OlXkQCAoINcl4dOUSSorhdQk

South Korean shipbuilder Hanjin Heavy Industries and Construction Philippines has filed for a voluntary rehabilitation due to ballooning financial obligations to Philippine and Korean lenders.

Subic Bay Metropolitan Authority (SBMA) said Thursday that Hanjin Philippines filed on Tuesday a petition before the Regional Trial Court in Olongapo City to initiate voluntary rehabilitation under Republic Act 10142 or “An Act Providing for the Rehabilitation or Liquidation of Financially Distressed Enterprises and Individuals.”

The SBMA Chairman Wilma Eisma said she was saddened to learn that the Korean shipbuilder—the biggest foreign investor in the Subic Bay Freeport Zone—is facing serious financial trouble.
 
Eisma noted that Hanjin Philippines officials revealed to the SBMA that the company has around $400 million in outstanding loans from Philippine banks on top of another $900 million in debts owed to South Korea lenders.

She was told that the company still has six pending multi-million new ship-building projects at its Redondo Peninsula shipyard in Subic and that these may have to be canceled if a rehabilitation plan does not materialize.

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“It’s really sad that Hanjin would be in dire financial straits after successfully building some of the world’s biggest ships here and putting the Philippines on the map as the world’s fifth largest shipbuilder,” she said.

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In the course of its operation, the company became the biggest employer among all registered businesses in the Subic Bay Freeport Zone with some 30,000 employees during its peak, and was recognized by both the Philippine Exporter Foundation (Philexport) and the Department of Trade and Industry (DTI) as top export performer, according to the SBMA.

“However, in face of recent liquidity problem, Hanjin Philippines has laid off more than 7,000 workers last December,” Eisma said.

The firm is about to lay off another 3,000 early this year until its workforce is reduced to just about 300 local workers and as few as seven Korean supervisors by March to do facility maintenance, she added.

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