Philippines Says HD Hyundai’s Partnership at Subic Will Launch Shipbuilding
Officials in the Philippines hailed the announcement that U.S. private equity firm Cerberus and South Korea’s HD Hyundai Heavy Industries have completed a strategic partnership agreement for shipbuilding operations at the former Subic facility. President Ferdinand Marcos Jr. called it a landmark moment that would provide a “fresh start” and a “strong foundation” for shipbuilding in the Philippines.
Cerberus acquired the southern portion of the former Subic shipyard in 2022, three years as South Korea’s Hanjin suspended operations when it filed for bankruptcy. Hanjin had been operating the facility since 2006. Settling the bankruptcy, the Philippines arranged for a portion of the facility to be leased to the navy for a new base and maintenance facility while Cerberus took the other portion promising to create a new industrial area and expand investment in the Philippines.
“We have established our position as the largest source of competent and able seafarers in the world. The next logical step for us is to ensure that the ships run by Filipinos can also be made by Filipinos,” said Marcos at the ceremony marking the signing of the new partnership agreement. “As HD Hyundai is recognized as one of the largest producers of ships in the world, we look forward to the opportunity to usher in a new era of shipbuilding in the country.”
Marcos highlighted that the Philippines was the seventh-largest shipbuilder in the world in 2022, contributing almost 400,000 gross tons of newly built sea and ocean-going vessels.
Cerberus committed to $40 million of investment to make the shipyard operational again and to attract new businesses and investors. The company said its strategy was to develop a diversified base of companies. It has already attracted Subcomm, a subsea cable company, and V2X, a logistics company to Subic. Reports are that it is also exploring the conversion of the Subic airport into a cargo and logistics hub.
A year ago, it was reported that HD Hyundai was interested in operating two of the dry docks at the site in Subic. The reports said it would be a maintenance facility. The company however has booked all the building slots at its three South Korean yards and has an extensive backlog for new ship deliveries.
Hyundai built the Philippine Navy's first two missile frigates and holds contracts for two anti-submarine corvettes as well as an offshore patrol vessel. It also holds a lifetime service support contract with the Philippine Navy for the guided-missile frigates.