Philippines Hails Shipbuilding Revival as HD KSOE Starts at Subic Yard
The Philippines is celebrating the revival of its shipbuilding industry after South Korean giant HD Korea Shipbuilding & Offshore Engineering (HD KSOE) commenced the construction of a large bulk carrier at its newly leased facility in Subic Bay, Philippines. It will be the first large ship to be built in the country since 2019.
In a significant move that the Philippines expects will help the country reclaim its position among the world’s leading shipbuilding nations, HD KSOE held a steel-cutting ceremony at Subic Shipyard to mark the start of the building of a 115,000-tonne petrochemical carrier. The vessel will be the first to be built at the HD Hyundai Heavy Industries Philippines (HHIP) and is the first of a four-vessel order placed by an unnamed Asia-based shipping company in December.
The commencement of the project is of significant importance to the Philippines, a country that had a long tradition of shipbuilding until 2019, when the industry melted down during the financial crisis and slowdown in shipbuilding. At its pinnacle, the country used to produce up to two million gross tonnes of ships annually and was one of the major contributors to economic growth and job creation.
With the South Korean giant investing $180 million this year in the revival of the Subic Shipyard and another $50 million expected to be invested by 2030, the Philippines expects massive economic benefits. Currently employing 1,200 people, the yard is expected to employ 4,300 people by 2030.
“Together with our partners, we are reviving shipbuilding in the country to strengthen industries, promote livelihood, and build a better, stronger future for the Philippines,” said President Ferdinand R. Marcos Jr during the ceremonies. “Today, we will begin reclaiming our rightful place among the world’s great shipbuilding nations.”
HHIP, a wholly owned subsidiary of HD KSOE, signed a 10-year lease for Subic Shipyard last year. The U.S. private equity fund Cerberus Capital took rights to the broader facility, as part of a plan to create a manufacturing and industrial park in Subic Bay.
In 2022, Cerberus paid $300 million to acquire the distressed Subic Bay shipyard from the former HJ Heavy Industries, which went bankrupt in 2019. It has invested $40 million to revitalize operations on the 300-hectare facility now known as the Agila Subic Shipyard. Located in Zambales Province on the western coast of Luzon, the facility has become a vital strategic hub for shipbuilding, subsea infrastructure, and logistics operations.
HD KSOE is commencing ship construction in the facility just a week after Cerberus and HD Hyundai announced the formation of a strategic partnership that saw the launch of Cerberus Maritime. Through the partnership, the two companies hope to play an instrumental role in the “Make America Shipbuilding Great Again” (MASGA) projects.
The South Korean company has already announced plans to utilize the Philippines yard as a strategic stronghold for the MASGA project, which is a joint Seoul-Washington shipbuilding cooperation initiative.
“Backed by government support, natural advantages, and a skilled workforce, the Philippines is emerging as a rising shipbuilding nation,” said Kim Sung-joon, HD KSOE CEO. “We will leverage HD Hyundai Subic Shipyard to further enhance our global competitiveness.”
During the site visit in August, reporters were told the goal is to build up to 10 ships a year within the next three to five years. The initial plan is to use the yard to build product carriers measuring 656 to 820 feet (200 to 250 meters) in length. The ships will be built in 16 to 18 months, and they also anticipate using the yard for offshore structures to support the wind energy sector.