June 6, 2023 – HD Hyundai Heavy Industries of South Korea intends to grow its ship-related business in Subic Bay, Philippines. In May 2023, the Philippine government said Hyundai is involved in discussions to expand its current ship repair and maintenance operations to include heavy shipbuilding manufacturing services.
As of this writing, according to Wikipedia, Hyundai Heavy Industries in South Korea is number three in the list of shipbuilding firms throughout the world. China Shipbuilding Industry Corporation is number one with Mitsubishi Heavy Industries at number two.
Hyundai Heavy Industries recently revealed its ambitious plans to increase its ship-related operations in Subic Bay, Philippines. This action not only shows Hyundai Heavy Industries’ dedication to global expansion in the ship building sector, but also indicates the company is aware of the strategic benefits Subic provides to this business model. With its long maritime history and great geographic setting, Subic Bay offers the business the opportunity to make a significant impact in Southeast Asia.
The Philippine Island of Luzon is home to Subic Bay, which has a longstanding reputation as a top nautical hub and U.S. Naval installation. With its deep waters, the bay is well suited for harboring huge ships like bulk carriers, tankers, and cargo ships. Additionally, Subic Bay is strategically close to important international shipping lanes, making it a desirable location for ship repair operations and shipbuilding.
The expansion plans for Hyundai Heavy Industries at Subic Bay are anticipated to cover a variety of its ship-related commercial operations. To meet the increasing demand for shipbuilding and repair services in the area, the company plans to establish new shipyards and facilities, including dry docks and repair yards. This action is in line with Hyundai Heavy Industries’ objective to diversify its business and increase its marketability internationally.
The existing Subic shipyard was taken over by a private equity firm from the U.S. called Cerberus Capital Management after the previous shipbuilder Hanjin Group’s bankruptcy at the Subic site. Reports indicate that Cerberus has invested $40 million in upgrades and repairs to the existing yard to make it viable and operational once again.
Recently, Philippines President Marcos Jr. met with Cerberus executives, and its chairman, former U.S. Vice President Dan Quayle. Cerberus executives reportedly briefed Marcos about the Hyundai Heavy Industries plans for the yard. According to reports from Cerberus, it appears Hyundai is showing interest in two existing dry docks at the existing location and is making plans to move in to by the end of the 2023. The President’s office issued a release that said, Hyundai’s expanded operation could create 5,000 to 15,000 jobs, without mentioning what kind of vessels will be built.
If this pans out, significant economic benefits will result from the development of Subic Bay for the Philippines and South Korea. The investment made in the area by Hyundai Heavy Industries will create job opportunities, draw in skilled employees, and strengthen the local economy. The Philippines will benefit from the transfer of technology and knowledge from Hyundai Heavy Industries as it works to strengthen its maritime sector and increase its share of the world shipbuilding market.
South Korea has long been one of the Philippines’ top trading partners. This shipyard expansion should significantly boost the Philippines and South Korea’s current economic relations. The engagement between Hyundai Heavy Industries and neighborhood businesses in Subic Bay will further strengthen bilateral commerce and investment between the two nations. This alliance will not only help strengthen the shipbuilding sector, but promote and increase other local industries like logistics, travel, Subic Bay hotels and resorts, Subic bay theme parks, recreational facilities, golf courses, entertainment, and other services.
Along with the financial benefits, Hyundai Heavy Industries’ growth in Subic Bay is in line with the global trend of environmentally benign and sustainable maritime operations. The business has been at the forefront of creating ship technologies that are more environmentally friendly, such as building LNG-powered vessels. Hyundai Heavy Industries will be able to support the Philippines’ initiatives to promote sustainable shipping and lower carbon emissions in its waterways thanks to this experience.
The expansion plans could, however, encounter issues that need to be resolved. To support the expanded shipbuilding activity, infrastructure improvements, such as bettering road connectivity and port facilities, will be essential. To satisfy the increasing demand for trained personnel, it will also be crucial to guarantee the availability of skilled labor and promote technical education in the area.
Finally, Hyundai Heavy Industries’ choice to increase its ship-related operations in Subic Bay, Philippines, demonstrates its commitment to bolstering its worldwide presence and utilizing the strategic benefits the area provides. The action is a win-win helping promote sustainable practices in the maritime sector and economically benefiting both South Korea and the Philippines. This project has the potential to turn Subic Bay once again into a vibrant shipbuilding and repair hub in Southeast Asia with proper planning and cooperation.