Jan Top Christensen, Ambassador of Denmark to the Philippines, has shared insights with the Danish Export Association on the Southeast-Asian country’s shipbuilding sector: The Philippines was ranked as the world’s fourth largest shipbuilding nation in 2014.
The ambassador explains that the archipelago is continuing its growth to consolidate its position as one of the largest shipbuilding nations in the world.
China and South Korea are the world’s leading shipbuilding nations with some distance. However, new building and maintenance hubs are rising in fast pace around the world. The Philippines, a nation of 7,100 islands, has due to a very positive investment climate, a high level of skilled workforce and a central geographical structure and location, grown into a major shipbuilding nation with a potential of much more investment over the coming years.
Because of the Philippines’ geographical structure, the country depends largely on maritime transportation for its logistics, and therefore the country has for long purchased second-hand ships from overseas companies. Now, however, the archipelago has commenced a rapid growth in shipbuilding.
“More than 100 shipbuilding yards operated by Filipino companies are sustaining a strong growth, and with the entrance of Japanese and South Korean shipbuilding giants, the market is growing fast,” says Jan Top Christensen, Ambassador of Denmark to the Philippines.
Opportunities in restructuring
The country is in the middle of a transition moving from mostly repairing and remodelling small and out-dated vessels towards a stronger focus on producing Philippine-made ships for the international market.
“The growth in the market is propelling investments in both repair and building sectors. This makes the market very interesting to Danish marine companies looking for an upcoming market,” Jan Top Christensen explains.
Four major players
There are four major shipbuilding companies in the Philippines, which mainly builds ships of larger tonnage capacities such as bulk carriers, container ships, and passenger ferries. These are Hanjin, Tsuneishi, Keppel and Herma.
“Hanjin’s construction of a 180,000-DWT commercial ship in 2013 was the starting signal to the international industry that the Philippines is growing to become a future force in the maritime sector,” Jan Top Christensen argues.
Governmental support increases incentives
With a 1,878,000 gross tonnage shipbuilding industry in 2014, the Philippines positioned itself in the company of the world’s top maritime countries.
“The Philippine government has had a strong focus on the maritime business for years, which is why foreign investments find a sustainable business environment in the country. Also, the Philippines has a Manpower Development Plan for the maritime sector, ensuring that the country has an adequate supply of skilled manpower for shipbuilding and repair.”
Ensuring growth in the economy
The Philippine economy is growing rapidly and the maritime industry is among the key contributors to the country’s growth. In fact, the shipbuilding industry employs more than 60,000 welders in the country.
“With governmental support, investment incentives and major players already on the market, the Philippines looks to sustain and develop its growth for the years to come,” Jan Top Christensen ends.