Cerberus, Hyundai formalize lease on Subic shipbuilding facility

0
147
HD Hyundai and Cerberus announced the partnership on May 14 during a ceremony in Malacañang. Photo from Presidential Communications Office.
  • Cerberus Capital Management and HD Hyundai Heavy Industries formalized their lease agreement on a portion of the former Hanjin shipbuilding facility in Subic, Zambales
  • HD Hyundai will move into a large section of the Agila Subic Shipyard and commence operations focusing initially on offshore wind platforms
  • HD Hyundai expects to invest about $550 million over 10 years and generate around 10,000 jobs within three to five years
  • The partnership between Cerberus and HD Hyundai is seen to “bring maritime manufacturing back to Subic and eventually restore the glory days of shipbuilding to our shores,” said President Ferdinand Marcos, Jr.

US-based private equity firm Cerberus Capital Management and South Korean shipbuilding giant HD Hyundai Heavy Industries Co. Ltd. have formalized their lease agreement on a portion of the former Hanjin shipbuilding facility in Subic, Zambales.

HD Hyundai and Cerberus announced the partnership on May 14 wherein the former will move into a large section of the Agila Subic Shipyard—formerly the Hanjin shipbuilding facility—and commence operations focusing initially on offshore wind platforms.

According to Malacañang, HD Hyundai is projecting to invest approximately $550 million over 10 years and generate around 10,000 jobs within three to five years.

Cerberus and Agila NY Naval Inc./Agila South Inc. in 2022 acquired the 300-hectare area that was once occupied by South Korean shipbuilder Hanjin Heavy Industries and Construction-Philippines, Inc., which had been Subic’s biggest locator before it went bankrupt in 2019.

READ: Cerberus acquires Hanjin’s Subic shipyard for $300M

The partnership between Cerberus and HD Hyundai is seen to “bring maritime manufacturing back to Subic and eventually restore the glory days of shipbuilding to our shores,” said President Ferdinand Marcos Jr. during the announcement of the partnership.

Marcos noted that the Philippines in 2022 was the seventh largest shipbuilder in the world, contributing almost 400,000 gross tons of newly-built sea and ocean-going vessels.

He added, however, that this was “a far cry from our capacity in the past and even far behind the output of shipbuilding behemoths like South Korea, and Japan.”

“Of course, 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 said.

“With this initiative of Cerberus and HD Hyundai, we will have a fresh start and a strong foundation in realizing our vision to be amongst the largest and most consequential shipbuilders in the world,” he added.

Marcos said HD Hyundai’s initial focus on the development of offshore wind platforms bodes well with the government’s goal to transitioning to renewable energy.

The president said he looks forward to the realization of Cerberus’ plans, including its interest in investing in microelectronics, semiconductors, and critical metals.

Malacañang earlier said Cerberus invested $40 million to make the shipyard operational again.

READ: Cerberus to propose conversion of Subic airport into cargo, logistics hub

Agila Subic Shipyard’s tenants now include Cerberus subsidiary SubCom LLC, engaged in building and installing submarine cables, and V2X, Inc., a provider of critical mission solutions and support to defense clients globally. The Philippine Navy also has an operating base in Subic.

Marcos said investments to be created at Subic Agila Shipyard “are especially beneficial to Subic because these will strengthen the freeport area’s vital role as a hotspot for industrial, commercial, and other economic activities.”

He said he also hopes investment plans by Cerberus and HD Hyundai “would also redound to the upskilling and reskilling of the Filipino workforce, enabling us to adapt to new technologies required by industry.”

Marcos encouraged HD Hyundai, in particular, to partner with the Commission on Higher Education and Technical Education and Skills Development Authority to find projects for the development of the country’s workforce. – Roumina Pablo