HD Hyundai to establish shipbuilding presence in Philippines' Subic Bay

South Korean conglomerate HD Hyundai has unveiled plans to commence shipbuilding activities in the Philippines early next year.

The development will come in the wake of the signing of a 10-year lease agreement between HD Hyundai's HD Hyundai Heavy Industries and private equity company Cerberus Capital Management through local subsidiary Agila Subic for 200 hectares within the former US Navy base in Subic Bay approximately 100 kilometres north of Manila.

HD Hyundai will invest the equivalent of US$550 million over the next 10 years in the operation of the facility, which is expected to have a maximum annual production capacity of 10 vessels.

The HD Hyundai facility will initially focus on the construction of product tankers measuring up to 250 metres long. The construction time for each ship is scheduled to be between 16 and 18 months.

The Agila Subic facility sits on the site once occupied by Hanjin Heavy Industries and Construction Philippines (HHIC-Phil). Cerberus acquired the Agila Subic site in April 2022, three years after HHIC-Phil filed for bankruptcy for having incurred debts equivalent to US$412 million.

Prior to declaring bankruptcy, HHIC-Phil had engaged in the construction of very large crude carriers and other commercial ships for overseas customers.