Australian Shipbuilder finds Philippines smooth sailing



In 2013, after evaluating several locations in Eastern Europe and Asia, Australian ship builder Austal opened its Balamban yard. When they went looking for a new location they had a number of criteria One was a lower cost base than Australia. Two was a pre-existing skills base. Three was a strong work ethic. And four was a nation politically friendly to the USA, Austal’s largest customer.

Since then they have haven’t looked back.

In a recent report in the AFR, Austal CEO Andrew Bellamy commented, “We recognised that in order to improve the competitiveness of our commercial products, we needed to find a way to do that in a low-cost environment. But lower-cost on its own was not going to sway the decision.”

The closer Austal looked, the more the Philippines made sense. The Pacific nation is the fourth-biggest shipbuilder in the world after South Korea, China and Japan. The familiarity with heavy manufacturing and the skilled employee base existed and the so did the cultural fit.

“We’d had a good experience of working with Filipino guest workers in Australia previously. We’ve had as many as 300 Filipinos working at Henderson on 457 (temporary work) visas and we knew that their English-language skills and cultural ethos was well-matched to the Australian work ethic,” Bellamy says.

“Also there has been a long history of American involvement in the Philippines – at a political level there is a co-operative relationship – so there was nothing to cause us any undue difficulty with our major customer.”

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September 9, 2014

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