Hanjin to invest additional $86 million in Subic facility

SUBIC BAY FREE-PORT, Philippines – An expansion project by Hanjin Heavy Industries and Construction Corp.-Philippines (HHIC-Phil) is expected to increase the total committed investments in the Subic Bay Freeport to more than $6 billion this year.

According to a top official of the Subic Bay Metropolitan Authority (SBMA), Hanjin will be putting up some $86 million in new investments starting September in order to produce ship components at its shipyard in the Redondo Peninsula here.

Hanjin officials who met with President Arroyo in Korea recently said the new capital infusions will be committed in two parts: $29 million starting September this year, and $57 million beginning next year.

“These pledges will bring Subic’s cumulative investment total to about $6.64 billion,” SBMA administrator/chief executive officer Armand Arreza said, pointing out that investments in Subic already stood at $5.78 billion as of the first quarter of 2009..

“With just the first $29 million, our investment commitments will be breaching the $6-billion mark this year,” Arreza said.

“With the succeeding $57 million, we will be hitting close to the $7.5-billion enhanced target that we have set for 2010,” he added..

Arreza said the Hanjin project will place Korean investments in the Subic Bay Freeport to $2.85 billion, the biggest foreign direct investment (FDI) here.

According to SBMA figures, Korean companies in the Subic Bay Freeport have put up a total of 234 investment projects since 2003. Filipino firms, which come in second in terms of investment volume, have put up a total of 533 projects worth $513.5 million.

The third biggest investors here are Taiwanese companies, with 41 projects worth $256.4 million, while the fourth biggest are Indian firms, with three projects worth $101.1 million, SBMA records also showed.

Arreza said that with the new investments, Hanjin will remain the single biggest employer here, with some 4,000 new positions to be added to some 16,000 jobs already existing at the Hanjin shipyard.

”These new jobs will help ease unemployment in Central Luzon,” Arreza said, adding that Hanjin’s move to produce ship components in Subic would create more growth in the local market in terms of raw materials and other production inputs.

“Best of all, with ship components produced locally, we shall have the right to claim that ships produced by Hanjin in Subic are entirely Philippine-made,” Arreza said.

Hanjin has so far constructed four container ships out of its Subic shipyard since 2007.  The Korean shipbuilder initially committed a $1-billion investment when it signed in at Subic in 2006, but increased its exposure by $68 million the following year.

Hanjin became the biggest exporter in Subic in the first quarter of 2009 after posting a freight-on-board (FOB) value of $179.36 million when it simultaneously delivered its third and fourth vessel outputs, the CMA CGM Topaz and the CMA CGM Opal.