PH eyes more shipbuilding investments
The Department of Trade and Industry, through the Center for International Trade Expositions and Missions (DTI-CITEM), seeks to expand the Philippines’ shipbuilding sector in its first-ever participation in the 15th Asia Pacific Maritime happening next month.
“With the onset of globalization, opportunities are immense in shipbuilding and repair. This drives us to charter a new direction in trade promotion, leading the first-ever Philippine exhibit in APM to highlight the country’s promising prospects in the international maritime trade,” said DTI-CITEM Executive Director Clayton Tugonon.
Known as Asia’s largest maritime and offshore exhibition, APM is a one-stop market for the regions’ maritime community joined by more than 14,000 visitors and buyers from Asia, and 1,500 exhibiting companies from 60 countries across the world. It showcases the latest in marine equipment, technologies, and service as well as port technology.
The country delegation eyes to invite more foreign investors and trade partners to augment the export-oriented operations of shipbuilding and maritime firms in country, in partnership with the Board of Investments (BOI).
According to Tugonon, their high-impact investment drive will focus on creating new partnerships and one-on-one business matching sessions as they leverage on the country’s world-renowned highly skilled workforce with their cost-competitiveness, outstanding work ethic, and ability to speak in English.
“Aside from our flexible workforce, the geographic location of the Philippines carries a strategic advantage that should be attractive to potential investors,” said Tugonon.
“This includes an abundance of coastline providing ocean access, adequate water depth and suitable areas for conducting sea trials. The Philippine is also in proximity to the center of global economic activity for shipbuilding and shipping since the activity is concentrated in three East Asian countries, and the Philippines is located along key Southeast Asian trade routes, making it a convenient location for repair.”
From a global perspective, the Philippines has been the fourth largest ship producer since 2010, next to South Korea, China, and Japan. In 2015, the Philippines accounted for 2.8 percent of world ship completions and 1.3 percent of ship exports.
Based on a study United States Agency for International Development (USAID), export-oriented shipbuilding has played a role in the Philippines economy since 1994. In 2015, it accounted for 2.6 percent of total exports from the Philippines at a value of US$1.5 billion.
Total estimated revenue in shipbuilding and repair industry in was approximately $1.6 billion in 2015. The industry employs 48,000 workers and is geographically concentrated in the greater Manila area and Cebu.
For export, the Philippines primarily produces bulk carriers and containerships as well as some tankers. Exports are driven by two large foreign-owned shipbuilders (Hanjin and Tsuneishi). Two other notable foreign-owned firms are Austal (small aluminum passenger/mixed-use ships) and Keppel (mostly repair).
Domestic shipyards primarily engage in ship repair for domestic ships, which accounts for 90 percent of domestic shipyard revenue. There are approximately 17 large or medium-sized domestic shipyards, 90+ smaller yards, as well as service and afloat contractors. Domestic yards that are engaged in shipbuilding build small vessels for domestic or internal demand (i.e., fishing, government, some passenger/cargo).
While domestic firms account for the largest share of the industry based on the number yards (95 percent), the two largest foreign-owned exporters account for nearly all exports, 75 percent of employment, and 97 percent of revenue. In both segments, backward linkages to materials and equipment are nascent, and nearly all inputs are imported directly or via distributors.