UPDATE 1-Hanjin to build $2 bln shipyard in S. Philippines

South Korea's Hanjin Heavy Industries has entered into an agreement to build a $2 billion shipyard in the southern Philippines, its second yard in the country, a state agency said on Friday.

The second shipyard will rise in a 441.8-hectare lot inside the Phividec Industrial Estate in the southern province of Misamis Oriental and is expected to be completed in 2017.

The new facility will have a capacity of 830,000 tonnes per year when completed, the Phividec Industrial Authority said in a statement.

The agreement was signed by Hanjin and Phividec officials on Thursday, it said.

Hanjin will be allowed duty-free importation of capital equipment and income tax holidays since it is located in the Phividec ecozone area.

This year, Hanjin is expected to complete the majority of its $1.68 billion investment in its first shipyard in the Philippines located at the Subic Bay freeport zone, northwest of Manila. Construction of the facility is scheduled to be finished by 2011.

Subic was once the biggest U.S. military facility outside the Americas before it was turned over to the Philippine government in the early 1990s.

Capacity constraints in Korea have forced Hanjin to look overseas for expansion. Philippine government officials earlier estimated Hanjin's annual exports from its Subic facility to reach at least $2.5 billion by 2016, equivalent to 40 ships, from about $521 million this year.

Hanjin's Subic facility has received orders for 28 container vessels, three bulk carriers and two oil tankers as of June last year. (Reporting by Rosemarie Francisco; Editing by Ben Tan)

Source:RamblerNews