US private equity company Cerberus Capital Management, in partnership with maritime manufacturer HD Korea Shipbuilding and Offshore Engineering (HD Hyundai), plans to start the operations of an offshore wind manufacturing plant in Subic Bay, Zambales by next year.
This will mark the initial restart of the maritime manufacturing in Subic following the shutdown of the shipbuilding facilities of then Hyundai Heavy Industries five years ago.
Last January, Cerberus and HD Hyundai signed a multi-year lease agreement that involves leasing a portion of the facility located in Subic Bay which initially focuses on building an offshore wind platform manufacturing facility.
The offshore wind platform project will bring thousands of employees into the country, but the entire Subic shipyard facility will end up with about 15,000 to 20,000 employees.
“We have formed a partnership with HD Hyundai, the world’s largest and leading, shipbuilding and marine engineering company. They will be leasing a large section of the shipyard from us and we’ll be bringing maritime manufacturing back to Subic at a very large scale with an initial focus on offshore wind platforms,” Alexander Benard, Cerberus (Singapore) Pte. Ltd. senior managing director, told reporters in a virtual press briefing.
The partnership will create substantial employment that will bring the economic activity and vitality back to the Subic Bay region.
Benard said the preparation to ramp up the operations will take 12 to 18 months.
“It will take some time to actually ramp up the operations, and there will be some investments over the next year and a half in the tens of millions or potentially even hundreds of millions in order to make the necessary modifications to the site area and to enable it to serve the purpose of this type,” he said but declined to disclose the amount of investment.
Benard said the commercial operation of the facility will start within 2025.
“We expect that within the next 12 to 18 months it will be operational. So the site preparations, the initial investments to bring this into an operational state, and the hiring and staffing up will take 12 to 18 months and once that is done, the operations will commence,” he said.
Initially, the partnership focuses on building an offshore wind platform, specifically the construction of the physical structures. These include the core structural portions of the offshore platforms.
President Ferdinand Marcos Jr. earlier welcomed the landmark leasing agreement between Cerberus and Agila Subic and leading maritime manufacturer HD Hyundai at Malacañang Palace.
In April 2022, Cerberus, through its affiliate Agila South Inc. (Agila Subic), acquired the assets and took over the operation of Hanjin Heavy Industries and Construction of South Korea’s over 300-hectare area in Subic, a former United States naval base turned economic zone.
Aside from HD Hyundai, Benard said the Philippine Navy is leasing about a quarter of the facility as well as Sancom Logistics and others.
“We believe that in its entirety, we will likely end up in the range of 15,000 to up to 20,000 in total for the entirety,” he added.
