Sunday, April 21, 2019

More ships to be built in Cebu

A SHIPBUILDING company based in Cebu for more than two decades now is bullish about its prospects, and its newest president wants to focus on cost competitiveness and human resource development.

Speaking yesterday with journalists, newly appointed Tsuneishi Heavy Industries (Cebu) Inc. (THICI) president and chief executive officer Akihiko Mishima said the company envisions to grow its average production to 25 to 30 ships per year.

For 2015, however, THICI will be delivering 18 ships, from 19 ships delivered last year.

“Currently, the company can produce an average of 20 ships per year but capacity-wise, we can build more. In an effort to strengthen cost competitiveness, THI aims to build 25 to 30 vessels per year,” the official said. Mishima has been with the Tsuneishi Group in Japan for more than 30 years. He joined THICI as a director in 2014 before taking over as president and CEO.

Going green

The shipbuilder maintains a shipyard that stretches across 1.4 million square meters in Balamban on Cebu’s western coast. The joint venture between Tsuneishi and the Aboitiz Group was established in 1994.

Aside from volume, THICI is also looking at eco-friendly vessels to survive in this “very competitive” shipbuilding environment, Mishima said.

The company has come up with the Tsuneishi Economical Standard Ship (TESS), which is positioned for its fuel efficiency and large cargo capacity.

Also under Mishima’s leadership, the 200th ship built in Cebu, TESS35, will be turned over to its owner in June 2015.

Last year, THICI introduced its latest ship model, the Eco-Ship TESS64 and TESS58 Aeroline, which were said to have increased fuel efficiency by 20 percent and reduced wind resistance.


“Tsuneishi brand ships manufactured by the Tsuneishi Group are of the same high level of quality, wherever they are made,” the president assured. The Tsuneishi Group also has shipyards in Japan, China and Paraguay. Ships built in Cebu now deliver coal, steel, logs, trucks and various cargo all over the world.

To enhance its manpower in the Philippines, Mishima said that THICI will send more of its Filipino employees to Japan for training.

Over the past two decades, the shipbuilder has sent 1,536 Filipino employees to Japan for technical training, language study, and cultural immersion. At present, Mishima said there are 224 engineers, skilled workers and administrative staff who are being trained in Japan.

Expanding local talent

Through its affiliate Tsuneishi Technical Services Philippines Inc. (TTSP), the company is also coordinating with the academe to incorporate the principles of shipbuilding engineering in the curriculum.

Engr. Segismundo “Jun” Exaltacion Jr., who was recently appointed as TTSP president, said it may take two to three years to realize this vision. He is the first Filipino president of TTSP.

He said that the company has started helping bridge the gap between the academe and the industry through their on-the-job training programs.

“There is a challenge in finding technical people (for shipbuilding),” Segismundo said, noting that only 20 percent of the applicants pass the company’s basic technical competency tests.

If more work-ready graduates become available in the next few years, THICI said this will pave way for the “localization” of management.

“Tsuneishi Heavy Industries is a Japanese company, yes. But as for site operation, it is run and managed by Filipinos. In fact, this year, we have three new Filipino presidents from our Tsuneishi Group of companies,” Mishima said.

To date, 792 THI employees, about 93 percent of the total workforce, are Filipinos while the remaining workers are Japanese expatriates.

Declining demand

In the last three years, THI’s revenues have decreased amid weaker demand. From P42 billion in sales in 2012, the company made P30 billion in 2013 and P24.5 billion in 2014. This year, projected sales are at P21 billion.

“The aftermath of the economic crunch since the Lehman shock in 2008 offered declining demands for building new ships. The unfavorable weakening of global ship prices, and a few order backlogs, are affecting the world’s shipbuilding industry,” Mishima said.

In 2014, the Philippines ranked fourth worldwide in terms of the number of ships completed by country. China ranked first, followed by Korea, and Japan. These countries contribute 90 percent combined of the total number, while the Philippines contributes two percent.

THICI’s investments, in its 20 years in Cebu, have reached P22 billion.

“The success of Tsuneishi clearly shows what we in the country can accomplish when competing on the world stage,” said Roberto Aboitiz, a director of THICI and Tsuneishi Holdings Inc. One challenge, he said, would be to replicate this success in other industries.
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