HD KSOE picks Philippines as offshore wind power base camp

HD Korea Shipbuilding & Offshore Engineering Co. (KSOE), the parent of the world’s No. 1 shipbuilder, is accelerating its offshore wind power push by setting up its first overseas base camp for wind power business in the Philippines, the center of the Asia Pacific offshore wind market.

HD KSOE announced on Wednesday that it signed a lease contract with US private equity firm Cerberus Capital Management to use plots and facilities at a large shipyard in Subic Bay, the so-called Subic Yard, to manufacture wind turbine foundations and expand its maintenance, repair and overhaul (MRO) services for warships.

The former Subic shipyard, about 110 kilometers northwest of Manila, the capital city of the Philippines, was formerly operated by Korean shipbuilder Hanjin Heavy Industries & Construction, which is now rebranded into HJ Shipbuilding & Construction Co., from 2006 to 2019 when it stopped the yard’s operation due to the prolonged shipbuilding industry slump.

In 2022, the New York-based PE firm acquired the shipyard, and the Philippine Navy is now stationed in part of the installation.

With the latest deal, the Korean shipbuilding giant plans to transform the Subic Yard as a maritime industrial center for the construction of floating platforms for offshore wind turbines and shipbuilding blocks, or modules, as well as to provide vessel MRO services.

The Philippines is considered a prime location to build a base camp for offshore wind farm projects as it is located at the center of the Asia Pacific offshore wind power market.

The wind power market including Australia, Taiwan, Japan, Vietnam, India and the Philippines is forecast to burgeon in the next few decades, according to research companies.

Global Market Insights forecast that the Asia Pacific wind turbine market, valued at $68 billion in 2023, will grow at a compound annual growth rate (CAGR) of 5.5% from 2024 to 2032.

Expecting a leap in the market, HD KSOE last month signed a memorandum of understanding with Scottish state-run organizations to join hands to develop floating offshore wind power farms in Scotland.

The Subic shipyard is also used by HD KSOE’s largest shipbuilding unit HD Hyundai Heavy Industries Co. (HHI), also the world’s largest shipbuilder, as its MRO services for battleships it built and delivered to the Philippine Navy. The center was set up in 2022.

Under the latest deal, the Korean shipbuilder will expand its MRO services in the yard.

The Philippines was already chosen by HD Hyundai Heavy as a base for the sale of its warships and specialty vessels throughout Southeast Asia, a move expected to guarantee enough MRO orders for the Subic MRO center.

HD Hyundai Heavy opened an office in charge of specialty ship engineering in Bonifacio, Manila in March.

HD KSOE is the intermediate shipbuilding holding company of HD Hyundai Co., a shipbuilding, oil refining and machinery conglomerate.

Write to Woo-Sub Kim at duter@hankyung.com
Sookyung Seo edited this article.