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Owners look to low-cost Philippines

RISING labour costs in established Asian repair centres such as Japan, South Korea, Taiwan, Singapore and Hong Kong, are prompting an increasing number of owners and managers to look at low-cost Philippines.

Manuel Sandoval, president of the Philippine Shipbuilding and Repairers Association (Philsar) said the involvement of Singapore's Keppel Group in the Philippines' three big repair yards had given a big boost to the industry.

'Keppel's entry has been a very positive development because the company has a worldwide marketing capability,' he said, adding that 'we are now competitive in the region'.

The Philippines has 83 registered shipyards, most of them small, of which 64 are also engaged in repair work. Of them, 12 primarily do repair work while another 88 companies which do afloat repairs.

Keppel has a substantial stake in, and manages, the Subic Bay Shipyard Corp, which has a 30,000 deadweight tonnes graving dock, three repair berths and repair shops for hull and machinery works.

The company also manages the 20,000 dwt capacity Cebu Shipyard and Engineering Works, which is located in Lapu-Lapu City in central Cebu province.

Keppel is also the majority shareholder in Kepphil Shipyard, which can repair 20,000 dwt vessels, and has three floating docks and a shiplift.

Among the medium-sized, by Philippine standards, are Atlantic Gulf and Pacific in Manila (10,000 dwt), Bataan Shipyard and Engineering (10,000 dwt), Sandoval Shipyards (5,000 dwt) and R and LT Shipyard and Realty Development Corp (2,000 dwt).

According to Kepphil Shipyard president Hoe Eng Hock, the Philippines has an abundance of cheap, skilled labour and a large trainable workforce.

'We have been repairing more and more foreign vessels, thanks to the rising (Japanese) yen and labour costs in other countries such as Singapore, Taiwan, South Korea and Hong Kong,' he said.

Since the Philippines' share of the international repair market was still very small, Mr Hoe said there was plenty of room for growth.

According to Philsar, repairers can look forward to a steady increase in orders as the domestic fleet ages, and as more foreign-flag vessels call at the Philippines.

A recent Philsar study report said the country's repair yards should be able to repair and convert more than 550 vessels of various sizes by the end of this year.

'By 2000, the Philippines should attain the status of a major repair centre for VLCCs and all types of cargo vessels,' the report said.

To help spur the industry's growth, the Maritime Industry Authority is considering rationalising customs, immigration and quarantine fees for ships coming in for repairs.

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