Foreign owners drive growth

Although price levels in the Philippines shiprepair industry are somewhat lower than Singapore, they are slightly higher than mainland China. This means Philippine yards can be competitive on projects where the steelwork is less than 50t and is dispersed over the vessel. Two foreign companies dominate the Philippines shipbuilding and repair industry. These are the transnational organisations Keppel Corporation Limited of Singapore and the Tsuneishi Shipbuilding Company of Japan. Keppel Philippines Marine owns three facilities, i.e. Subic Shipyard & Engineering at Zambales, Keppel Shipyard at Batangas and Keppel Cebu. Tsuneishi owns the Tsuneishi Shipyard also located at Cebu. These four facilities account for the bulk of ship repair and newbuilding business in the country. One of the reasons why they dominate the local industry is due to the full technological backing and capital investment from their parent companies. Both the Batangas and Cebu facilities operated by Keppel are involved in local and world markets while the Subic Shipyard, which operates a graving dock for ships up to 340,000 dwt, is totally involved in the international market. Having consolidated its position locally, Keppel is now looking to expand its markets and type of work involving greater co-operation between the Philippine facilities and the main yard in Singapore. At Batangas facilities comprise a 200m x 38m (40,000 dwt) graving dock, which was opened for service during 1999, and a 5,000 dwt capacity shiplift system. There are also plans for a second graving dock to be built on adjoining land. In addition, there are two floating docks although one will be sold soon while the other, with a 6,000 dwt capacity, will be transferred to the main Singapore shipyard later this year. The yard has a workforce of 500 with some 600 sub-contractors available. Keppel Cebu recently gained success in the reefer market with a number of these types of vessels owned by Del Monte entering the shipyard. Del Monte previously utilised shipyards in mainland China, but price levels offered by Keppel Cebu for general repair work are on a par with China. It is only with larger steelwork repairs that the Chinese yards offer cheaper price levels. The Japanese owned Tsuneishi facility delivered its first newbuilding, the 23,000 dwt bulker Sea Amelita, in 1997 and has since completed some 20 bulk carriers up to 52,300 dwt for owners in Japan, Germany, Taiwan, Croatia and Turkey in addition to local shipping companies. The yard currently has a full orderbook until early 2003 and is also active in the shiprepair business with two floating docks of 5,000 and 8,500t lifting capacity respectively. The other yard of note is the fast ferry builder, FBM Aboitiz Shipbuilders of Cebu. This company, now renamed FBMA Babcock Marine, has constructed a number of small fast catamaran ferries. Since 1999 however, the yard has been struggling to find new work with the general decline in new orders for fast ferries. Its latest newbuild is a 52m Tricat for South Korean ferry operator Dae A Express Shipping. n