A worker near a ship under construction at Hyundai Heavy Industries' Shipyard in Ulsan, South Korea, May 13, 2015. REUTERS/Kim Hong-Ji/File Photo
(Bloomberg) —
South Korea’s HD Hyundai Heavy Industries Co. Ltd. will set up operations in a former US naval base in the Philippines, an investment that may usher in the return of shipbuilding there.
A Philippine affiliate of US investment firm Cerberus Capital Management LP will lease a portion of a shipyard in Subic Bay Freeport Zone to HD Hyundai, the world’s largest shipbuilder. HD Hyundai, which is also into heavy industry and energy sectors, will initially build offshore wind platforms in the yard.
Cerberus Senior Managing Director Alexander Benard told a briefing on Wednesday that HD Hyundai is expected to start constructing wind platforms within the next 12 to 18 months.
The South Korean company is projecting to invest about $550 million over 10 years and generate around 10,000 jobs within three to five years, according to the Philippine government.
“We welcome HD Hyundai’s investment that will not only open new doors for our offshore wind industry, but will also bring maritime manufacturing back to Subic and eventually restore the glory days of shipbuilding to our shores,” President Ferdinand Marcos Jr. said during the announcement of the Cerberus-HD Hyundai partnership on Tuesday at the presidential palace.
The South Korean group is a key supplier and maintenance provider for the Philippine Navy. In 2022, it won a $573 million contract to build six units of 2,400-ton offshore patrol vessels for the Southeast Asian nation’s navy.
The Philippines was among the top shipbuilding nations in the world until a local unit of South Korea’s Hanjin, which operated the Subic Bay yard, collapsed in 2019. Cerberus took over the yard in 2022 and has since attracted other tenants, including subsea cable and global logistics companies, Marcos said.
“The Philippines is also quite excited to see the realization of Cerberus’ plans, including its interest in microelectronics, semiconductors, and critical metals,” Marcos added.
© 2024 Bloomberg L.P.
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