The Views on Damen's Philippine Investment Interest

It was well-known news that the largest industry notable for providing jobs to the locals as well as the primary booster of the country on the shipbuilding arena filed a bankruptcy given the unfavorable circumstances that put this industry into the disadvantage in terms of economic vitality. The recent developments though are quite interesting wherein ranging from Government proposals to take-over operations to White Knight companies' intention of buying it out, it seems that it may affect the course of shipbuilding operations for the years to come, especially if that shipbuilder is also providing the construction and development of Naval Ships on its portfolio.

Damen is among the shipbuilders that have interest over Hanjin Philippines
aside from an Unknown US shipbuilder. 
Photo Sources: HHIC-Phil; Damen
In the first weeks of the year 2019, topics about the bankruptcy of Hanjin Heavy Industries Corporation came to the spotlight, primarily discusses the cause of its demise and what is to come for the country's shipbuilding industry, given that they contributed much to the country's development especially on its stance within the top 5 shipbuilding countries of the world.

And here comes the proposal of the Department of National Defense together with its secretary Mr. Delfin Lorenzana that the government or its local non-government partner company shall take over the Hanjin facilities wherein this may help the country produce its own naval and coast guard ships. The stance was seconded by the Senate majority chair Miguel Zubiri wherein such investment made by Hanjin before its demise will not be gone to waste. However, the latest developments as reported by Nikkei Asian Review outlet comes as both Damen and an unknown shipbuilding company from the United States show interest over the shipyard as they are on the talks with Hanjin as well as its key creditors where negotiations are still on-going with deals and options still provided to how to keep operations going on the shipyard while guaranteeing jobs for those who remain in the company. While these shipbuilders show interest to the company, it remains to be seen to whether they can proceed to the take-over of the facilities as they are cautious in approaching this matter, given the factors that may define the feasibility on operating this shipyard wherein the market, the expenses, and the profitability being the factors on making this decision. Such plans found out to be unfavored by Damen, as it seeks other investment plans as this will be discussed across the article.

Nevertheless, there is still potential on shipbuilders such as Damen where their entry may mean a lot especially to the AFP Modernization efforts where they may provide the know-how and resources in a way that, it may decide to produce warships for the country on the basis that it may pitch on locally-made products that an end-user such as the Philippine Navy and the Philippine Coast Guard to use.


Damen is a Dutch Conglomerate specialized in both civilian and naval shipbuilding. Founded in 1927 in the Netherlands by two Damen brothers Jan and Rien, this company spread its reach across the globe with several shipyards that are under its operations where it caters a lot of customers from both civilian companies to the navies from various countries such as its home nation the Netherlands and Indonesia where they help built corvettes and Frigates with a local shipbuilding partner.

The company is notable in the Netherlands that most of its surface vessels such as their frigates, landing platform docks, and offshore patrol vessels were made through its Schelde shipyard where each in the fleet is still in active duty doings its responsibility to protect the Dutch waters and its national interest, as well as being part of North Atlantic Treaty Organization or NATO where each member nations have a responsibility to have in terms of putting up a defense. 

On the civilian side, its production also aims at freighters such as Container Ships, Ocean Tankers, Heavy-lift ships, and other Cargo-based vessels as well as passenger-oriented ones like ferries and yachts. This wide range of varieties of products they produce covers a huge market base for them to produce income in the same way that other shipyards like South Korea's Hyundai Heavy Industries produce for their country's naval force as well as for civilian customers.

A Sigma-class 9813 variant Corvette made by Damen. Obtained
from the Damen website.
Damen provides a wide range of products especially on the naval vessel category in which, shall the deal for investment proceeds, may provide much in terms of local shipbuilding capability, not to mention that this may provide the Philippine Navy its products that will help protect the country's national interest across the shores as mandated by law while helping the local labor as well as for the economy to flourish. Apparently, the offers range from corvettes down to offshore patrol vessels in which all aim for better offshore security and sea-based logistics that lead to the country's maritime security and development.

Landing Platform Docks

In the Philippine Navy Modernization efforts, Damen offers its Landing Platform Dock product that they produce in which they may compete with Sigma partner in Indonesia PT PAL in terms of the production of these large support ships.

In the production history of Damen for Landing Platform Docks, they have produced the Rotterdam-class LPDs intended for the Royal Netherlands Navy wherein these ships are still in active service as of the present date. Those vessels are a bit larger than the Tarlac-class Landing Platform Docks that are currently in service with the Philippine Navy which is derived from the Indonesian Makassar-class LPDs and its Banjarmasin-class variant which were produced in South Korea and eventually in Indonesia. 

There are chances for this vessel to find its way to the Naval Fleet Inventory, but that may go remote given that the Philippine Navy already obtains the Tarlac-class from Indonesia that may get supplanted by more hulls for commonality and logistics chain purposes. Nevertheless, it may be a welcoming addition if their offer is considered and the conditions are met.

Sigma-class vessels of corvettes and frigates

One of the notable products Damen present for various navy use across the world, The Sigma-class line of vessels with different variants are found to be ideal combat ships that a navy may have especially on the variables a certain country needs on a vessel that can deliver its performance on the mandated duties and responsibilities of an organization.

Known by Damen as the "Ship integrated geometrical modularity approach (SIGMA) concept" of naval hull design, the Sigma-class design of ships introduced a geometrical design wherein this was employed on purchased Indonesian corvettes known as the Diponegoro-class corvettes. To take note, the same country also obtains the Frigate variant of Sigma-class which is the Martadinata-class Frigates where the same design is also utilized by Damen in building hulls for the Mexican Navy. Joining Indonesia and Mexico, Morocco also obtains a Sigma-class ship on its fleet which in itself performs according to their needs. The Philippine Navy is currently materializing its procurement process for the Corvettes under Horizon 2 wherein Damen may provide these Sigma-class warships to compete with other suppliers under Competitive Bid. Shall they win, as well as having their shipyard investments planted in the Philippines may mean a win-win scenario that benefits both national security and the local economy.

Given its reputation in Indonesia, it may be possible in the future for the country to consider these products in which logistically-wise may be provided by an ASEAN neighbor. Nevertheless, this possibility remains to be seen depending on the current variables such as the investment decision in which it may influence whether this may be seen or not.

Offshore Patrol Vessels (OPV)

Alongside corvettes and landing platform docks, the company is also participating in a bid that involves Offshore Patrol Vessels where the Philippine Navy is opted to have six units of these surface assets on its fleet.

In last year's ADAS or Asian Defense and Security 2018 Exhibition, Damen together with its local partner Propmech presented a design in which they tweak it within of what is at that time the partial specifications needed by the Navy for an Offshore Patrol Vessel. To take note, companies like Austal and ThyssenKrupp also provided their prospective designs on this project wherein they compete with Damen on the design and effectiveness of their respective offer in the hopes that they will end up grabbing the contract and eventually deliver them the products needed that in the process, they are improving their foothold in the Philippine market where with additional after-support chain may mean an improved relationship as well as the reputation that guarantees continuous support for the end-user as well as continuous income generation for the supplier.

Having a local partner such as Propmech means a lot for Damen given that the former already participated in partnerships such as the ones with Lung Teh of Taiwan for the production of MPACs on several variants. Hence, things will be seen to what extent the partnership is to advance on a deal that means much for Damen's entry to the Philippine Naval market and the long-term deal relations that it corresponds.

This is Propmech/Damen's offer for the Offshore Patrol Vessel Project
for the Philippine Navy. This was presented at last year's ADAS 2018.
Photo Obtained from MaxDefense.
In the overview of this article, it has been said that Damen at one point is interested in having the facilities of Hanjin as its own where there is what will it be the ideal investment that helps the local industry and its workforce as well as improving the country's naval capabilities for them to patrol the long coastline that this nation obtains.

It turns out that Damen isn't that interested in getting a stake over a facility that was once operated by a company now seeks help over its faltering finances over a declaration of bankruptcy. Apparently, Damen is still interested to invest in the country but not in a form of taking over Hanjin facilities as first reported. This is what Janes 360 website provided where Damen is keener on collaboration with local companies such as Propmech over the Offshore Patrol Vessel design provided in an image above. Perhaps it is a nicer decision for the company to make where they may start small on building their own facilities especially in collaboration with a local company where in the process the partnership may grow eventually while safeguarding their income in the process in which will provide the worth out of the investments made. Not also to mention that the Procurement Law especially the R.A. 9184 and its 2016 Revised IRR requires Filipino ownership or stake of at least 60% for it to be eligible to participate. 

From there, their move may see as a guarantee on their part where investments may find its worth especially if they manage to market their product and have it specified within the requirements where in that way they may penetrate the local market such as the Philippine Navy as well as other local sea-oriented companies. Hence, it might be a good thing to be seen to the extent of their endeavors to help improve not only their company's standpoint but also for the local industry and providing the tools for national security.


Damen's desire to invest in the country is a welcoming one where they may help improve the ailing shipbuilding industry in the light of the bankruptcy of one of the largest shipbuilders in the country which is Hanjin Heavy Industries and Construction Philippines (HHIC-PHIL).

At first, the company is seen to be interested in the facilities of the bankrupt company which at the process was rejected and instead opting on partnerships with local companies where in this case may be the one with Propmech given their collaboration in presenting a design for an Offshore Patrol Vessel when it was presented in ADAS 2018 that took place last year. Nevertheless, despite their faltering interest on getting a stake over Hanjin's facilities, the optimism is still there for Damen to have where there is still the plans for them to invest to the country and its performing economy, also given with the Philippine Navy's drive of procuring naval vessels for its ever-growing fleet as part of Modernization effort. To give information on the projects as discussed throughout this article, Damen is interested to participate in the Navy's Corvette, Landing Platform Dock, and Offshore Patrol Vessel projects as well as patrol vessels that are for the Philippine Coast Guard given that this civilian-oriented uniform organization is also Modernizing its own fleet where it is already taking place in the form of the French-made Boracay-class crafts, Japanese-made Parola-class Multirole Response Vessels or MRRVs as well as other projects that are in their pipeline.

Hence, their interest may go with the hopes that they have managed to invest in the local market in a way that their products are within the specifications needed by an agency to carry out their mandate. From there, shall they succeed in tapping the local market for their products which is primarily on both naval and civilian shipbuilding, it will be a win-win scenario where Damen will get its share of cash inflows on their sales while keeping the industry kicking that provides jobs to the people as well as providing assets needed to protect the country's national interest as well as its citizen's desire to live peacefully and free.

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