Mitsubishi Heavy Industries pushes forward with a "super" shipbuilding alliance plan

2017-04-05 09:00

Faced with a sluggish global shipbuilding market and pressure from South Korean and Chinese shipbuilders, Japanese shipbuilders are joining forces to create a "super" shipbuilding alliance to enhance synergy and compete with their Chinese and South Korean counterparts.

It is reported that Mitsubishi Heavy Industries recently signed a basic agreement with Imabari Shipbuilding and Namura Shipbuilding to form an alliance in the merchant ship construction business, enhancing the competitiveness of its members in the global shipbuilding market. Mitsubishi Heavy Industries is also continuing discussions with Oshima Shipbuilding to establish a similar alliance. According to previous plans, the other three members of the new alliance are Imabari Shipbuilding, Oshima Shipbuilding, and Namura Shipbuilding. Once established, the new alliance's shipbuilding volume will be second only to Hyundai Heavy Industries in the world.

In its statement, Mitsubishi Heavy Industries said the agreement aims to strengthen the companies' competitiveness in the global market, achieving complementarity and synergy while respecting the independence of each company, thus achieving sustained growth.

The complete basic agreement covers several core areas, including the development of new ship types and technologies, sharing designs and employees, standardizing engineering tools and equipment, and flexibly utilizing the construction capabilities of each company. Mitsubishi Heavy Industries will also conclude separate contracts with each partner, clearly specifying how the alliance will be reflected in specific business operations.

Mitsubishi Heavy Industries hopes that by establishing this new alliance, it can strengthen its business competitiveness around its long-cultivated engineering advantages centered on energy-saving and environmental technologies, and further enhance the influence of Japanese shipbuilders in the current rapidly changing global shipbuilding industry.

However, Mitsubishi Heavy Industries' statement did not mention the previously planned spin-off of its merchant ship business in fiscal year 2018, nor any financial cooperation with other shipbuilders.

On August 30, 2016, Mitsubishi Heavy Industries announced that it had begun negotiations to form an alliance with other Japanese shipbuilders, revealing its ambition to strengthen its global market competitiveness through this alliance.

According to International Ship Network, Imabari Shipbuilding currently holds the largest order backlog among Japanese shipbuilders, followed by Oshima Shipbuilding in 3rd place, Mitsubishi Heavy Industries in 4th, and Namura Shipbuilding in 7th. The total shipbuilding volume of the four companies, including Mitsubishi Heavy Industries, is second only to Hyundai Heavy Industries in the world. Within Japan, the shipbuilding capacity of the alliance will also surpass Japan Marine United (JMU), making it the largest shipbuilding alliance in Japan.

In 2016, the order backlog of Japanese shipbuilders exceeded that of South Korea for the first time in nearly two decades, second only to China, making it the country with the second-largest order backlog globally.

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