Dutch firm eyes Hanjin

Dutch firm eyes Hanjin
Roy Stephen C. Canivel - March 09, 2019 https://business.inquirer.net/266343/dutch-firm-eyes-hanjin?utm_expid=.X...

Dutch company Damen Shipyard is looking into the prospects of investing in the financially troubled Hanjin facility in Subic, the Department of Trade and Industry (DTI) said on Friday.

Damen’s technical team has already surveyed the facility and is now reviewing how it will fit in their current plans, Trade and Industry Undersecretary Ceferino Rodolfo said in a statement.

The agency said DTI Secretary Ramon Lopez had a meeting on March 4 with company chair Kommer Damen, wherein Lopez pushed for Hanjin’s case.

However, Damen’s possible level of involvement in the Philippine business of the Hanjin Group of South Korea is still unclear.

While Damen, with 36 shipbuilding and repair yards, has so far delivered more than 6,500 vessels in more than a hundred countries, these are smaller vessels. Hanjin’s local unit, on the other hand, produces large container ships.

Nevertheless, this puts the Dutch firm in a good position because it’s not affected by the overcapacity in the cargo ship market that caused Hanjin to scale down, the DTI quoted the company chair as saying.

This develops amid the ongoing financial rehabilitation of Hanjin Heavy Industries and Construction Corp. Philippines after it could not pay its huge debts from local banks and even creditors abroad.

The financial struggles translated to labor issues as well as thousands of workers lost their jobs in recent months.

As the pressure keeps piling up, the search goes on for the company’s so-called white knight who could save the cash-strapped giant in Subic.

At one point, even the Duterte administration considered taking over the shipbuilder’s facility.

It is not clear how Damen’s interests will go hand in hand with the move of DTI’s investment arm to court Chinese companies to take over Hanjin’s local unit.
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Rodolfo, who is also Managing Head of DTI’s Board of Investments, said back in January that two Chinese companies were interested to take over Hanjin’s operations.

He did not disclose their names, although he said one of them was a state-owned firm. The idea of having a Chinese firm take over Hanjin had been met with reservations fueled by national security concerns.

A DTI representative clarified that the meeting last Monday was held because the Dutch company was looking for areas to invest here in the Philippines, making Hanjin one of other options.

The company already has a footprint in the Philippines through its partnership with the Filipino company Propmech Global Technologies and contract with the Philippine Airlines, DTI said.

Moreover, Board of Investments (BOI) Gov. Napoleon Concepcion said that shipbuilding companies from Australia and Norway were investing in Visayas and Mindanao and offered similar sites to the Dutch company.

“Shipbuilding is one of our priority industries not just in Subic, but also in many locations in our archipelagic country. We have the required manpower and skillset for new shipbuilders. As a market ourselves, the country is also in need of smaller vessels like the Roll-On-Roll-Off (RoRo) ships,” said Lopez.

According to a statement from Subic Bay Metropolitan Authority (SBMA), Hanjin has invested $2.3 billion in its shipyard facility.

It has manufactured some of the world’s biggest cargo and container ships, bulk carriers, liquefied petroleum gas carriers, very large crude oil carriers (VLCC) and very large ore carriers (VLOC).

Citing company records, SBMA said Hanjin has delivered since 2008 a total of 123 vessels to various clients across the globe, thus cementing its foothold in the highly competitive shipbuilding market.

The numbers show the importance of the company in the shipbuilding industry. The Philippines has been the fourth-largest ship builder in the world based on gross tonnage since 2010, the DTI said in a previous policy note.

Although domestic firms account for the biggest share of the industry based on the number of yards, the two biggest foreign-owned firms—Hanjin and Tsuneishi in Cebu—account for nearly all exports, 75 percent of employment and 97 percent of revenue, DTI said.