With China shut, Vale iron ore ships head to Philippines (Two of Vale's giant ships to arrive in Subic Bay)

SINGAPORE - Two of the world's biggest iron ore carriers are due to arrive in Subic Bay Freeport for the first time next month, shipping data showed, as Brazilian mining giant Vale looks to use the Philippines as an alternative base to reach Chinese ports.

China, the world's largest iron ore importer and Vale's top market, has yet to fully open its seaports to the giant vessels after domestic ship owners strongly protested the arrival of the first and only vessel of the type into the country in late December.

With accessibility to Chinese ports uncertain, Vale has been forced to rely on its transshipment hub in the Philippines, a costlier alternative that involves employing more vessels and workers.

"I'm not surprised that Vale is sending its ships to the Philippines. They have no choice with China's ports still closed off to them," said a Singapore-based ship broker.

"They have to keep these ships moving or face major losses."

The 400,000-deadweight-tonne Vale China is due to arrive in Subic Bay Freeport, located in the Philippines' main Luzon island, on Feb. 22, shipping data showed.

That is 10 days after similar-sized Vale Brasil is expected to dock.

'A LOT OF MONEY'

Draught measurements indicated the two ships were fully loaded, each likely carrying around 350,000 tonnes of iron ore, traders said.

At current iron ore prices, the value of each cargo is nearly $50 million.

"That's quite a lot of money. Vale may be struggling to sell shipments of 200,000-300,000 tonnes in one go and so it makes more sense for them to break it up," said an iron ore trader in Singapore.

Vale's plan is to set up a floating storage vessel in its planned transshipment hub in Subic Bay from where iron ore would be transferred to smaller vessels such as panamaxes or capesizes and then transported to buyers in Asia.

Keeping readily available iron ore in Subic Bay would also allow Vale to quickly meet China's requirements, the Singapore trader said, since vessels from Brazil take at least a month before they reach China, versus about a week from the Philippines.

Vale officials in Singapore declined to comment.

Vale is also setting up a transshipment centre in Malaysia as an alternative to Chinese ports.

The Brazilian miner in October broke ground for a $1.3 billion iron ore distribution centre in Malaysia's northern Perak state, which could be ready to handle the giant ships by 2014.

Vale is banking on a fleet of 35 Valemaxes to slash shipping costs to China and better compete with Australian rivals BHP Billiton and Rio Tinto .

The 388,000-tonne Berge Everest was the first and only Valemax allowed into China, docking at Dalian Port on Dec. 28 to unload iron ore that has yet to be sold.

The China Shipowners Association has helped keep further ships from arriving at its domestic ports. The group fears the fleet will give Vale a monopoly on both the shipping and iron ore markets at China's expense. (Randy Fabi and Manolo Serapio Jr., Reuters)

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TRAP Age Group series slated in Subic

THE recruitment program of the Triathlon Association of the Philippines goes into high gear in scenic Subic when the 2012 National Age Group Triathlon series presented by Century Tuna gets going on Feb. 5.

Triathletes can choose to race either in the standard distance course (1.5K swim-40K bike-10K run) or in the sprint distance course (750-M swim-20K bike-5K run).

Triathletes aged 16 to 19 will race in sprint distance while participants aged 13 to 15 as well as first-timer adult participants will endure the mini-sprint course (350-M swim-16K bike-2.5 K run).

The SuperTriKids Aquathlon will be held over a 200-M swim-400-M run (for participants aged 9 to 10) and 350-M swim-1.5K run (for 11-12 years).

At stake in the event sponsored by the Subic Bay Metropolitan Authority, Century Tuna, Gatorade, Philippine Sports Commission, Asian Centre for Insulation Philippines Inc. and ARENA are medals and gift certificates for the top 3 winners of each age-group as well those in the sprint, mini-sprint and STK aquathlon. All participants can avail of post-race brunch that will be offered starting at 8:30 a.m.

The swim event will be held at the Dungaree Beach while cycling will start at the beach venue reaching specific turning points around the Freeport. Afterwards, participants will return to Dungaree Beach for the run leg and the finish line.

Close to 250 participants have so far registered for the event. Interested parties may contact the TRAP at 710-8259, 399-6598, mobile number 0915-6394233, or log on to rreyes_upm@yahoo.com or visit Triathlon.org.ph. (Malaya)

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Mendoza rules Subic run

Ryan Mendoza and Jul Laiza Camposano ruled the 42.125K marathon over a field of 4,000 runners in the 2012 Subic International Marathon at the Remy Field of the Subic Bay Metropolitan Authority last weekend.

Mendoza finished in three hours, seven minutes, four seconds, while Camposano clocked 3:58:10, to bag the top prize of P20,000 each in the event organized by eXtribe, Inc. in partnership with the SBMA, PNP and AFP.

Jofill Sabado and Monica Torres topped the 21K event with clockings of 1:20.44 and 1:32:52, respectively. They received P10,000 each. The 10K winners were Lohn Leerams Chicano (34:19) and Merlyn Lumagbas (46:03) who received P5,000 each.

Gen. Sammy Tucay, SIM founder and chairman, joined the runners of the 10K event while Father Melo Diola of the DILAAB Foundation joined the runners of the 21K event.

The 2012 SIM was organized to support the community transformation programs of Christian Officers Reform the Police Service (CORPS) and the DILAAB Movement.

The participation of both local and international runners from the US, Canada, Indonesia, Malaysia and Singapore raised P120,000 for the programs that will benefit street children in Olongapo and Metro Manila. Father Diola received the check for CORPS and DILAAB Movement. (Philippine Star)

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SBMA fast-tracks accreditation of Ayala mall merchants

The Subic Bay Metropolitan Authority (SBMA) has processed the business application of more than 400 local and international companies wishing to locate at the Ayala Harbor Point mall here by conducting a one-day, one-stop business processing designed to fast-track the accreditation of the new business locators.

“This is a first time in SBMA that we have put together all permit-issuing SBMA departments in a business processing event to simplify the process,” SBMA Chairman Roberto Garcia said.

“We hope that we could encourage more merchants to invest here when they see how easy it is for businesses to set up shop in Subic,” Garcia added.

The one-stop registration process was introduced after an “unprecedented volume” of non-Subic Bay Freeport (SBF) enterprise firms signified intention to sub-lease commercial spaces at the Harbor Point Mall, which is now under construction at the central business district of this free port.

Harbor Point marketing manager Argee Gomez said Ayala is about to finish the basic structure of the mall and is now allowing merchants to start the development and provisioning of their stalls.

“This will, with the full support and cooperation of the SBMA, help fast-track the construction of the Harbour Point mall and allow us to meet the target operation date,” he added.

Among the requirements that each merchant should complete before operating a business in Subic are: business registration from the Business & Investment Department – Leisure; accreditation permit intended for suppliers, contractors or service providers from the Accreditation Department; building permit from the Building Permit & Safety Department; environmental permit from the Ecology Department; gate passes for employees from the Office Services Department; sanitary clearance from the Public Health & Safety Department; and vehicle passes from the Transportation & Communication Department.

After going through said requirements, the business locator then pays all fees to the SBMA Treasury Department before the permits would be released by the issuing departments.

During the one-day, one-stop accreditation process, the SBMA’s Management Information Systems Department and Tourism Department also provided support to smoothen the processing flow, noted Chairman Garcia.

In view of the accreditation of its sub-leases, Harbor Point expects to open up more than 2,000 job opportunities, initially, for residents of the Subic Bay Freeport, Olongapo City, and the provinces of Zambales and Bataan.

Gomez said a wide range of jobs will be available – store managers, human resource personnel, management trainees, supervisors, merchandisers, store marketing officers, accounting staff, customer service representatives, programmers, sales clerks, service crew, stockmen, kitchen staff, bartenders, security guards, maintenance personnel, massage therapist, cashiers, warehousemen, and janitors, to name a few.

Because of this, the company will be holding a job fair, dubbed as “Careers at Harbor Point,” on January 26 and 27, from 8:00 AM to 5:00 PM at the Subic Bay Gym.

Gomez also explained that Harbor Point mall, which is fully owned by Ayala Land Inc., would feature open-air spaces, a garden, an active zone, aside from facilities where the public can shop, dine and relax.

It will also have international and local high-end stores, as well as a transport terminal with lounges and comfort rooms, and ample parking spaces for vehicles.

Gomez added that Ayala malls all over the country are named differently from each other to highlight the distinct characteristic of the place where they are built. As such, the Ayala mall here was named Harbor Point because of Subic’s bayside location. (SBMA Corporate Communications)

PHOTO:
SBMA personnel assist more than 400 international and local firms that are registering for business operations at the Ayala Harbor Point Mall in the Subic Bay Freeport.

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Phoenix Petroleum acquires Subic firm

LISTED OIL firm Phoenix Petroleum Philippines, Inc. has completed its acquisition of Subic Petroleum Trading and Transport Philippines, Inc., the company said in a disclosure to the bourse recently.

Phoenix Petroleum is looking to use the license to operate of Subic Petroleum inside the Subic Bay Freeport Zone.

“Pursuant to the separate approvals of the Board of Directors as well as the stockholders last January 28, 2011 and March 11, 2011, respectively, we would like to announce that the company has concluded the purchase of 100% of the shares of Subic Petroleum,” Phoenix Petroleum said in its disclosure.

Subic Petroleum “is engaged in the business of buying and selling, supply and distribution, importation and exportation, storage and delivery of all types of petroleum for industrial, marine, aviation and automotive use.”

Phoenix Petroleum announced its plans to acquire Subic Petroleum in February last year.

“The company is actually a small firm which has no physical assets and we paid around P2 million for the acquisition. Our primary objective in the purchase is the license to operate in the Subic Bay Freeport and service locators in the area that our other depots cannot service,” said Phoenix Petroleum Chief Finance Officer Joseph John L. Ong in a telephone interview with BusinessWorld.

He added Phoenix Petroleum wants to provide petroleum and fuel to industrial locators in the area and there are no plans to build retail service stations so far.

It acquired the firm at a price of P800 per share for a total of 2,500 shares held by Subic Petroleum’s former owners.

The company said funding for the purchase “is sourced primarily from internally generated funds.”

Phoenix Petroleum’s net income from January to September 2011 rose 61% to P416.7 million from year-ago levels of P258.5 million.

The growth was attributed to stronger revenues from “the expansion of the independent oil company’s retail network and increase in sales from its retail and commercial accounts.”

Revenues of the company increased by 111.4% to P20.7 billion in the nine-month period ending September compared to P9.8 billion in the same period in 2010.

Phoenix Petroleum currently has a network of 198 stations at the end of September from 161 stations at the end of 2010. Majority of the stations are located in Mindanao with eight in the Visayas and 48 in Luzon.

Shares of Phoenix Petroleum remained unchanged at P11 apiece. (Emilia Narni J. David, BusinessWorld)

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Brazilian iron ore ship heads for Philippines

SINGAPORE­ -- A giant iron ore vessel owned by Brazil’s Vale, a multinational mining company, is on its maiden voyage to the Philippines and is expected to dock at Subic Bay in early February, Reuters data and shipping sources said on Monday.

The 400,000-deadweight-ton (dwt) Vale Brasil would be the second of the company’s so-called Valemaxes, which are very large ore carriers, to sail to Asia.

The first vessel, the 388,000-dwt Berge Everest, unloaded at Dalian Port on Dec. 28, 2011, ending months of delays in getting the world’s biggest dry bulk ships into China, Vale’s top market.

The cargo, estimated at 350,000 tons, has yet to be sold, however, and is sitting in storage, traders said.

Vale is banking on a fleet of 35 Valemaxes to slash shipping costs to China and better compete with Australian rivals BHP Billiton and Rio Tinto.

Reuters Freightviews and independent shipping data showed Vale Brasil is scheduled to arrive in Subic Bay on Feb. 11. Draught measurements indicated the vessel was fully loaded with cargo.

Vale Brasil was supposed to be the first of Vale’s huge ships to arrive in Asia, but was diverted last June to Italy after the Chinese government failed to provide permission for the ship to dock at Dalian Port.

A source at Subic Bay Freeport said they had not yet been advised of the Vale Brasil’s arrival.

“But we are ready anytime to accept the ships,” the source told Reuters, adding the port is deep enough to accommodate Valemaxes.

Vale aims to turn Subic into an iron ore transshipment center, where it can dock its Valemaxes, transfer cargo to smaller vessels and then use these to supply its clients in other parts of Asia.

Sources at Subic Port had said they expected the transshipment operations to start in late January or early February, as soon as Vale’s ship arrives.

The Philippine facility would be the first of at least two transshipment centers Vale is planning to open in Asia.

The Brazilian miner in October broke ground for a $1.3-billion iron ore distribution center in Malaysia’s northern Perak state which would be ready to handle the Valemaxes by 2014.

The China Shipowners Association has opposed Vale’s fleet, worried that the vessels will give the miner monopoly on both the shipping and iron ore markets at China’s expense.

The influential group has also raised concerns about the safety of the huge ships after Vale Beijing, the newest member of the Valemax fleet, developed cracks in its hull on its maiden voyage last month. (Reuters)

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SubicTel opposes wi-tribe petition

A WHOLLY owned subsidiary of Philippine Long Distance Telephone Co. (PLDT) wants the National Telecommunications Commission (NTC) to deny the application of San Miguel Corp.’s telecom unit to offer broadband services in the areas within the Subic Bay Metropolitan Authority (SBMA).

In a filing with the NTC, Subic Telecom said that the feasibility study done by wi-tribe Telecoms Inc. does not establish its legal capacity to the propose broadband services in its target market.

“The study does not show that wi-tribe is financially capable to operate the proposed wireless broadband service and that is economically viable and feasible for it to operate within the Subic Special Economic Zone,” Subictel said.

It added that the technical study and report of wi-tribe is essentially based on conjuncture and wish lists.

“The figures are not based on actual existing data. Wi-Tribe, a new player in the telecommunication industry simply does not have the figures to support its claims,” Subictel said.

“Nowhere is it established that the Subic Economic Zone may absorb a new market entrant. It certainly does not establish compliance with any jurisdiction requirements,” the PLDT affiliate added.

At present, Subictel is providing digital subscriber line (DSL) and other broadband services in the Subic Bay Freeport Zone, Olongapo City and Subic town areas.

Documents filed with the NTC showed that Wi-Tribe plans to spend P354 million for the proposed wireless broadband service in the Subic Special Economic Zone (SSEZ) for over a period of five years.

Wi-Tribe estimated an annual broadband subscribers of 15,484 for year five of operation.

The perceived market size of the SSEZ Internet market is 47,506 based on 2007,2009 and 2010 historical figure.

The SSEZ includes Olongapo City, Subic Bay Freeport Zone, Municipalities of Subic, Zambales, Hemosa and Morong in Bataan.

The pricing options to be offered to the SSEZ potential customers are Plan 598 for 512 kbps; Plan 998 for 1mbps and Plan 1998 for 2mbps.

Wi-Tribe said the schedule for roll out will start this year depending on the issuance of all permits required from the local and national governing agencies.

For initial roll out, Wi-Tribe said the current frequency assigned to the company on the 2.5Ghz and 700 MHz nationwide will be used.

In SSEZ, Wi-Tribe will be deploying 75 sites using 2.5 Ghz frequency at 5 Mhz, or 10Mhz channel. bandwidth. (Darwin G. Amojelar, The Manila Times)

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SBMA, Subic stakeholders bring Holiday cheers to indigent communities

While most companies and agencies were partying in celebration of the Christmas season, the Subic Bay Metropolitan Authorities (SBMA) and some business locators and concerned groups in this free port were busy reaching out to indigent communities in the area.

The annual gift-giving activity, said SBMA Chairman Roberto Garcia, are part of the continuing commitment of the SBMA and various groups in the Subic Bay Freeport to share with indigent communities around the free port the blessings they receive each year.

“This is not any other donation or relief operation,” Garcia clarified. “This is sharing, in our humblest way, the blessings that Subic Freeport has received and will be receiving in the future.”

Garcia said that aside from the SBMA, many locator-companies in Subic coordinated with the agency to identify beneficiary communities for their gift-giving projects in line with their corporate social responsibility program.

Some of the recipients of the outreach projects by the SBMA and Subic locators were Aeta communities at Sitio Tralala in Olongapo City; Mampweng and Pastolan villages in Hermosa, Bataan; and Timac in Morong, Bataan.

Meanwhile, at the Nagbayan Elementary School in Castillejos, Zambales, a 600-liter water tank was installed and turned over by the Busan National University of Education (BNUE) in Korea to the public school to help ensure a clean and potable water system for its 300 students and teachers.

On behalf of Garcia, SBMA deputy administrator for administration Robert Martinez acknowledged the Korean state university for its benevolence and SBMA deputy administrators Knette Fernando and Raul Marcelo, public relations manager Armie Llamas, and Korean Freeport locator Vincent Chun for their efforts in tapping kind-hearted organizations for the benefit of poor communities nearby.

“They are the people who are responsible in getting our gift-giving program going. We should thank them for their efforts in inviting good Samaritans in our community to help the poor, especially this Christmas season” he said.

On his part, BNUE president Dr. Kim Sung Yon expressed his commitment in helping local communities, especially school children whom he described as future leaders of the country, as a gesture of gratitude for the heroism of Filipinos.

“Our history tells of a special relation between the Philippines and South Korea. We will not forget the (Filipino) troops who fought with us during the Korean War,” he said.

Kim added that with the assistance of the SBMA and local government units, BNUE will continue with its community projects to help improve the system of education for the benefit of the children and their future.

In Nagyantok, Subic, Zambales, teachers and students of the College of Subic Montessori (CSM) visited the Nagyantok Elementary School Annex to distribute assorted toys, school supplies and food packs to 290 pupils. The Montessori groups also conducted fun games and presented some song and dance numbers to cheer the less fortunate children.

CSM president Soledad Maningding said that the school’s gift-giving project was made possible through the initiatives of students.

“Instead of having an expensive Christmas party, the CSM high school and elementary students opted to collect used and new clothes, canned goods, toys, and even some personal savings to donate to the students in Nagyantok,” Maningding added.

She noted that CSM students and their parents are already planning to make the gift-giving project a yearly commitment as a way of sharing blessings to the less-privileged. (SBMA Corporate Communications)

PHOTO: Dr. Kim Sung Yon, president of Busan National University of Education (3rd from left) and Castillejos Mayor Jose Angelo Dominguez inaugurate a water tank donated to the Nagbayan Elementary School in Castillejos, Zambales. Assisting in the ceremony are SBMA deputy administrator for corporate communications Knette Fernando (right), officials of the Castillejos-Department of Education and representatives of Busan University.

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