Japanese shipbuilders are investing in energy-efficient vessel technologies in the hope of fighting off cheap competition from Chinese and South Korean rivals.
China, South Korea and Japan now account for more than 90 percent of the global shipbuilding industry, but Japan has been struggling to compete on price with its neighbors.
Japan, which led the industry for more than 40 years, now trails far behind China and South Korea in terms of tonnage, and, since the global financial crisis of 2008, price competition in the industry has increased, making it very difficult for Japan to secure new deals.
There were 35 million gross tons of new shipping on Japanese shipbuilders’ order books at the end of March, half the tonnage in September 2008, and some in the industry are concerned that orders may dry up in 2014.
Industry officials are hoping that energy-efficient and environmentally friendly technologies may offer a way out of the crisis.
“Eco-ships are prerequisites,” said Masafumi Okada, managing director of Mitsui Engineering & Shipbuilding Co. “We cannot fight without them.”
Japan was behind the International Maritime Organization’s revisions in July to the Marpol convention for the prevention of pollution from ships. Regulations to reduce carbon dioxide emissions will be gradually strengthened from January.
A top executive of a heavy machinery maker said Japan “took a rare lead” in establishing the new international rules.
Mitsubishi Heavy Industries Ltd. has developed a system to reduce friction on ship bottoms using bubbles. It has been installed on two heavy-cargo ships for the Nippon Yusen KK group and will be adopted on three grain carriers for a major U.S. trader.
The company has also received orders for four LNG tankers that can reduce air resistance.
Other companies are working on technology to improve fuel efficiency by modifying screws and installing solar panels.
Meanwhile, some shipbuilders are looking overseas to enhance cost competitiveness.
Kawasaki Heavy Industries Ltd. has acquired a stake in a Chinese company that owns a large shipyard. The company announced on May 5 that it will construct oil and gas drilling vessels with a Brazilian shipbuilder.
Tsuneishi Shipbuilding Co., a midsize specialized shipbuilder based in Fukuyama, Hiroshima Prefecture, already owns shipyards on the Philippine island of Cebu and in China’s Zhejiang province.
President Takao Kawamoto said the company is considering building another overseas shipyard.
“We want to decide on a candidate site in Southeast Asia by the end of the year,” he said.
Mitsubishi Heavy Industries has ended construction of commercial vessels in Kobe, concentrating operations in Nagasaki and Shimonoseki.
The last commercial vessel built there, the Emerald Ace, was launched on March 9 in front of a crowd of 6,500 people.
“We made a difficult and significant decision after considering recent conditions surrounding (the industry),” President Hideaki Omiya told a news conference.
Some 1,600 commercial vessels, including many well-known ships, were constructed at the Kobe Shipyard & Machinery Works, which opened in 1905.
The grim industry environment forced IHI Corp. and JFE Holdings Inc. to merge their shipbuilding subsidiaries after four years of stalled negotiations.
The new company, Japan Marine United, will be established in October, the first major industry realignment in Japan in 10 years.
Shinjiro Mishima, who will become president of Japan Marine United, indicated a possibility of further integration, saying that his company will welcome other shipbuilders joining it.
In April, 20 major shipbuilders set up a new company, Japan Ship Investment Facilitation Co., to help Japanese shipbuilders win more orders from abroad.
The company will arrange for finances, including low-interest loans from the Japan Bank for International Cooperation.
(This article was written by Hiroaki Kimura and Tetsushi Yamamura.)
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