Monday, 8 June 2009

Subic investment pledges reach $7B

Rey M. Garcia

SUBIC FREE PORT — Investment pledges for the country’s top free port and economic zone have reached nearly $7 billion during the first six months of the year, officials said.

Fresh capitalization of $86 million from South Korean shipbuilder Hanjin Heavy Industries and Construction Corp. brought the amount of pledges to $6.64 billion.

Hanjin’s investments will be used to put up new facilities to manufacture ship spare parts and other components.

In a statement, the Subic Bay Metropolitan Authority (SBMA) said new investments from Hanjin will be delivered in two tranches. An initial $29 million will come in September, while the remaining $57 million will come in the first quarter of next year.

The SBMA made the announcement after Hanjin officials met with President Gloria Macapagal-Arroyo in South Korea recently and committed new investments totaling $86 million.

SBMA administrator Armand Arreza said investments in Subic stood at $5.78 billion as of the first quarter of 2009. "These pledges will bring Subic’s cumulative investment total to about $6.64 billion," he said.

The new commitments by Hanjin will place Korean investments in the Subic Freeport to $2.85 billion, the biggest volume of foreign direct investments here.

With the new investments, Hanjin is also expected to remain the single biggest employer in Subic, with some 4,000 new positions to be added to some 16,000 jobs already existing at the Hanjin shipyard in Subic’s Redondo Peninsula.

Hanjin has so far constructed four container ships out of its Subic shipyard since 2007.

In the first quarter of 2009, it became the biggest exporter in Subic after posting revenues of $179.36 million when it simultaneously delivered its third and fourth vessels.

The Korean shipbuilder initially committed a $1-billion investment when it signed in at Subic in 2006, but increased its exposure by $68 million the following year.

Mr. Arreza said continued confidence by foreign investors, particularly Korean companies, will help double the number of workers in two years.

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