RP's biggest shipbuilder: 'The best time to invest is now'

CEBU CITY — A global economic slowdown offers the best time to invest in the Philippines now — not tomorrow, not next year.

Several of the world’s global finance giants like UBS of Switzerland, LGT Bank of Liechstenstein and Merrill Lynch of the USA have had their top officials fly in from Singapore and Hong Kong to host luncheon and dinner meetings with the regents and officers of the Anvil Business Club to exchange views on the state of the world economy and investment options in these tumultuous times.

It is unfortunate that not many of the world’s leading wealth managers are recommending the Philippines or our stock market as preferred investment options, because I believe there is so much untapped potential here in our growing economy. Why? I blame the noisy troublemakers who unfairly and unnecessarily soil the international image of the Philippines — our many (not all) shamelessly corrupt politicians and generals, the hoodlums who call themselves the Abu Sayyaf, and others.

If it’s true that there’s a global economic slowdown, then that should be good news for the most efficient and hardworking entrepreneurs to start new ventures, to expand their existing businesses, or to make changes in their operations.

Why? Any economic slowdown can bring down costs for business rentals, real estate prices or demand and lower construction costs, or at least stretch out the payment terms. Any downturn offers unbelievable bargains and unparalleled opportunities, which only the boldest and wisest can dream of and grab. The Jewish Pritzker family founded their vast real estate fortune and future Hyatt hotel chain during the Great Depression of the 1930s in Chicago.

Isn’t the best time to buy stocks when times are tough, when most buyers are worried and stock prices are depressed? The titans of wealth in history have always followed this dictum since time immemorial — buy low, sell high.

On a recent trip to Cebu, that dynamic entrepreneurial “Queen City of the South,” as the guest of the Aboitiz family’s FBMA Marine, Inc., I asked to see the bigger next-door shipbuilding complex owned by Japanese investors, of which the Aboitiz clan is the domestic partner. It is one of the world’s best shipbuilders.

I was fortunate to have been driven around by Antonio R. Moraza, the 51-year-old president and CEO of Philmico Foods Corp. owned by his Aboitiz clan and a director of Tsuneishi Heavy Industries. He drove me in his Toyota Land Cruiser to see for myself the existing 75-hectare industrial complex of Tsuneishi in Balamban municipality, plus the 75 new hectares added of mostly reclaimed land for expansion, which shall be fully complete in 2010. It was humongous, with huge ship parts lying on the ground like Lego blocks being assembled.

The existing Tsuneishi complex can build huge ships like 58,000 to 60,000-ton bulk carriers and cargo ships. However, when the new expanded facilities are completed by 2010, the Philippines can by then construct and export to global markets gargantuan ships as big as 180,000 tons each!

Right now, Tsuneishi employs 5,000 Filipino engineers and skilled workers. By 2010 when the expansion is totally finished, the firm will have a total of 9,000 employees, many of whom will earn much higher than the minimum wage and will gain technical skills. 

The new Tsuneishi facilities beside the sea are awesome, where huge ships can be assembled and launched directly into the ocean. I suggest that hardworking Cebu-born Tourism Secretary Ace Durano recommend to Japanese investors and their partner Aboitiz Group that they develop parts of this Tsuneishi complex into a tourist destination for international and local visitors.

Moraza’s cousin Roberto “Bobby” Aboitiz said that Tsuneishi’s Japanese investors are so impressed with Cebu’s shipbuilding capabilities and good investment climate that they are now reinvesting on a massive scale. He said, “The town of Balamban here in Cebu province has never had it so good.”

Although the contractor of the Tsuneishi expansion is wholly Filipino-owned firm Metaphil, all of the steel used for the facilities was reportedly imported from China. Why isn’t the national government pushing for an integrated national steel mill similar to those in China or South Korea, that will support other essential factories instead of pushing useless, overpriced schemes like the former education broadband project or the government Internet project?

Tsuneishi Heavy Industries’ revenues for 2008 are expected to reach a record P15 billion, and the shipbuilding capacity and facilities will be doubled by 2010. It was the Aboitiz family leaders who invited and convinced the Japanese to invest in Cebu province 15 years ago, when beautiful, seaside Balamban municipality only had coconut trees and rice fields.

When the Tsuneishi shipbuilding complex was being started, leftist activist groups tried to block the project, citing alleged environmental degradation issues. Investigations revealed that the protesters were actually secretly financed by the shipyard labor unions in Japan, who feared losing jobs due to this new Cebu facility.

Ever since its opening, the successful Tsuneishi enterprise has indeed provided Cebuano engineers and skilled laborers over P2 billion in salaries per year, plus many other benefits like better schools, better roads and higher taxes for the once-sleepy rural town and for Cebu province.

The Japanese investors and their Aboitiz partners thank the Cebu provincial government, led by Governor Gwen Garcia, for their all-out support, an example of how pro-business and progressive politicians can work well with the private sector in promoting win-win economic development.

Unfortunately, there are many other politicians who act and think of themselves like greedy Mafiosi out to fleece or mulct money out of investors and entrepreneurs without allowing the latter to profit.

While we’re on the subject, whatever happened to those local datus, those allegedly corrupt politicians in the towns of Misamis Oriental who reportedly blocked South Korea’s Hanjin shipbuilding conglomerate from investing in huge, US$2 billion manufacturing facilities in their region? If it’s true that political ineptitude or alleged greed were the causes, why don’t we jail and harshly punish corrupt politicians for the high crime of economic sabotage?

Now is not only the best time to ignore doomsayers and to invest in the Philippine economy; we must also demand that politicians, bureaucrats and men in uniform on local or national levels should not obstruct business permits and harass investors, whether big or small companies and entrepreneurs.

We should all promote less corrupt and divisive politics and more rugged free enterprise, long-term, job-creating investments and faster economic growth!

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