More Japanese shipbuilders mull consolidation
More Japanese shipbuilders are considering consolidating their operations, taking a cue from the tie-up between Imabari Shipbuilding and Japan Marine United (JMU) to compete against their Chinese and South Korean rivals.
Japan's Tsuneishi Shipbuilding said today it has agreed with Mitsui E&S to discuss a possible tie-up in shipbuilding operations. Tsuneishi is planning to invest in Mitsui E&S Shipbuilding and co-operate in building merchant vessels. They are planning to finalise details of the agreement by the end of 2020 and complete the deal by October next year.
The proposed tie-up will allow Tsuneishi and Mitsui E&S to better capitalise on their global shipbuilding capacity and design and marketing capability. Tsuneishi and Mitsui E&S in 2018 originally began collaborating in design and development of commercial vessels, as well as efforts to enhance cost competitiveness.
Tsuneishi specialises in the construction of 30,000-180,000 deadweight tonne commercial vessels, such as oil tankers, bulk carriers and container ships at its shipyards in Japan, China, the Philippines and Paraguay. Mitsui E&S Shipbuilding earlier this year decided to close its Chiba shipyard in March next year and focus on shipbuilding operations at a Chinese joint venture.
Growing competition with Chinese and South Korean shipbuilders has forced a wave of consolidation in the Japanese shipbuilding industry in recent years. Imabari and JMU in March this year formalised an agreement to set up Nihon Shipyard, a joint venture to design and market merchant vessels through a capital tie-up. Nihon is expected to be launched in October this year with Imabari holding 51pc and JMU 49pc.
Mitsui E&S has also entered talks with rival shipbuilder Mitsubishi Heavy Industries (MHI) on a possible sale of its naval shipbuilding business. MHI is planning to focus on building passenger ferries and government ships including naval vessels.
New export orders during January-June received by Japanese shipbuilders dropped by 38pc from a year earlier to 66 vessels, or 2.94mn gross tonnes, according to the Japan ship exporters' association. This includes 45 bulk carriers and 14 tankers. Marketing efforts have been largely hindered globally because of Covid-19 restrictions.
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