Philippines is Rising as Ship Repair hub in Asia-Pacific Region

Austal Ship Yard in Balamban Cebu, Philippines

Philippines as Ship Repair Hub

The Philippines is positioning to become the ship repair hub in the Asia-Pacific region for oceangoing merchant and fishing vessels taking advantage of its strategic location to the region's shipping routes, but would require foreign direct investments to pursue this development.

This was contained in a study on the ship building and ship repair industry of the Philippines conducted by the Japan International Cooperation Agency and the Nomura Research Institute as part of the ongoing formulation of industry roadmaps by the Department of Trade and Industry.

Based on the study, the Philippines have the right ingredients to become ship repair hub. Its strengths include an inland sea, bay and deep seashore, abundant of labor force  and legalized fiscal incentives.

The study has also identified FDIs from Japan and Korea as most promising because shipbuilders from these countries are finally looking outward for expansion opportunities.

The shipbuilding industries in China, Japan and Korea are also reaching their maturity levels thus the need to develop new hubs outside of these countries.

The study has urged that the Philippine Investment Promotions Plan and MARINA to sell the Philippine strengths provide possible locations with maritime data, and present opportunities to shipbuilders in China, Japan and Korea.

Based on its charter, MARINA has been tasked to adopt and implement a practicable and coordinated maritime development program, which shall include among others, the enhancement of domestic capability for shipbuilding and ship repair.

Conducting business matching between Philippine developers, shipbuilders and suppliers and shipbuilders was also urged for Japan, followed by Korea and China.

The domestic shipbuilding industry, however, faces some weaknesses including small and outdated local shipyards, little domestic demand and little support industries, the Nomura study said.

It is also facing global threats like the global shipbuilding recession and emerging maritime structure demands in other countries.

Based on the Nomura study, Chinese and Korean shipbuilders have increased completion of ships being built with China having the biggest share of 40 percent of total number of completed vessels while Korea is second with 34.6 percent share and Japan 18.1 percent. Together, these countries account for 99 percent of total global market.

The study further said that new orders for ships globally are in a downward trend after the shipbuilding bubble in 2007. The scenario points to global shipbuilding "recession" in the coming years.

To this date, there are 121 registered shipbuilding and repair facilities in the country. Of these facilities, 99 are classified as small, 14 are medium and 8 as small. The industry also employs 8,047 workers.

In the past, the output of shipbuilding industry was limited only to small ships, tankers, barges, fishing vessels but with the entry of new players like Tsuneishi Heavy Industries of Japan and Hanjin Shipyard of Korea, the Philippines is now ranked overall as the world's fourth largest player in shipbuilding.

As of the first half of 2012, the Philippines ranked world's fourth highest in terms of booked orders with China, Japan, Korea and Brazil in the top four.(BCM) (http://is.gd/ZjNW4f)

Manila Bulletin 

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