Mitsubishi Heavy Industries spins off shipbuilding business to restructure its "founding business"

2017-08-02 09:00

To reorganize its shipbuilding business with a history of over 130 years, Mitsubishi Heavy Industries recently decided to spin off its shipbuilding business into an independent subsidiary to facilitate cooperation with other Japanese shipbuilders.

The Shipbuilding and Ocean Engineering Division is the oldest department of Mitsubishi Heavy Industries, with a history of over 130 years. However, due to fierce competition from Chinese and South Korean shipbuilders and the redesign of already-ordered ships, the accumulated losses exceeded 270 billion yen by last year. Mitsubishi Heavy Industries Nagasaki Shipyard also decided to withdraw from the luxury cruise ship construction market and readjust its business scope.

Therefore, on July 31, Mitsubishi Heavy Industries officially decided to spin off its shipbuilding business into an independent subsidiary to thoroughly reform, clarify the responsibility for the shipbuilding business, and better cooperate with other Japanese shipbuilders. The new subsidiary will be established on January 1, 2018, completing the reform of the merchant ship business.

On January 1, 2018, Mitsubishi Heavy Industries will establish a new wholly-owned subsidiary in Yokohama City, focusing on small and medium-sized vessels undertaken by the Shimonoseki Shipyard, engaging in ship engineering, design, manufacturing, and repair. Cooperation with Imabari Shipbuilding, Oshima Shipbuilding, and Namura Shipbuilding in the merchant ship business will also be mainly handled by the new company.

In addition, on January 1, 2018, Mitsubishi Heavy Industries will also establish another subsidiary in Nagasaki City, focusing on liquefied gas carriers and large vessels. In 2015, Mitsubishi Heavy Industries established Mitsubishi Heavy Industries Shipbuilding, a subsidiary responsible for building hulls and sections, at the Nagasaki Shipyard's Koka Factory. The newly established subsidiary will serve as the successor company to Mitsubishi Heavy Industries Shipbuilding.

It is understood that the shipbuilding industry is the oldest department of Mitsubishi Heavy Industries. The history of Mitsubishi Heavy Industries can be traced back to the Meiji Restoration period. In 1884, Mitsubishi founder Yataro Iwasaki leased the Nagasaki Shipyard of the Ministry of Public Works from the government, naming it the Nagasaki Shipyard, which later developed into Mitsubishi Shipbuilding Co., Ltd. By 1934, as the company's business had expanded to heavy machinery, aircraft, and railway vehicles, the company was renamed Mitsubishi Heavy Industries, Ltd.

After World War II, according to the US occupation authorities' policy of dismantling 阀 Mitsubishi Heavy Industries was split into three companies in 1950: West Japan Heavy Industries Co., Ltd., Central Japan Heavy Industries Co., Ltd., and East Japan Heavy Industries Co., Ltd. However, with changes in US policy and Japanese domestic politics, the three companies merged in 1964, rebuilding Mitsubishi Heavy Industries, Ltd., which exists to this day.

Three of the four shipyards currently under Mitsubishi Heavy Industries' Shipbuilding and Ocean Engineering Division—Nagasaki, Kobe, and Shimonoseki—build military products.

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