Japanese government considers integrating 15 yards to form shipbuilding super group

Japan is currently exploring the possibilities to integrate 15 major shipyards in the country under a so-called All Japan Shipbuilding merger plan, following similar steps by neighbouring shipbuilding rival countries China and South Korea, local financial newswire Nikkei is reporting.

The merger plan comes after Japan’s two largest shipbuilders – Imabari Shipbuilding and Japan Marine United (JMU) – declared in December they would form an alliance and enter into a capital tie-up.

To move forward with the tie-up, Imabari and JMU recently announced that they would form a joint venture by March 31, 2021, to integrate sales and design business for bulker and tankers. Imabari and JMU will hold 51% and 49% shares in the joint venture respectively.

The All Japan Shipbuilding merger plan is led by Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT), which has entered preliminary discussions with some domestic yards.

Besides the tie-up between Imabari and JMU, Mitsubishi Heavy Industries also announced a plan at the end of last year to sell one of its largest yards to compatriot Oshima Shipbuilding. Another two major Japanese shipbuilders Mitsui E&S and Tsuneishi Shipbuilding both have a shipbuilding presence in China and the two entered into a business partnership for commercial shipbuilding back in 2018.

Japan is currently the third largest shipbuilding nation in the world after South Korea and China. It had been the largest shipbuilding nation in the world through to the turn of the century at which point cheaper neighbouring rivals expanded at its expense.

Last year, the two largest shipbuilding groups in China – CSSC and CSIC – started a merger by creating China Shipbuilding Group, while two major South Korean yards – Hyundai Heavy Industries (HHI) and DSME – are also in the process of merging.

In February, the Japanese government filed a petition at the World Trade Organization (WTO), questioning the legitimacy of the merger between HHI and DSME.

In a statement responding to this story, Peter Broad, Managing Director of Broadreach Marine and IIMS Deputy Vice President, based in South Korea, said,
“These mergers have to happen for the national preservation of shipbuilding industries in each country (Korea and Japan).

So why are the rest of the world (international monopolies commission) sticking there noses in to something that has already happened in China?

No one has questioned or tried to stop the China National Shipbuilding Industry from merging shipyards to facilitate better commercial and technical structures for future contracts and survival.

Please let Korea and Japan get on with their shipbuilding business to keep international trade moving and stop global interference with these mergers. They are each in the nations interests for commercial and technical survival. It is not creating monopolies. The countries are competing against each other for shipbuilding contracts based on price and quality, so still an open market and buyers choice.

Don’t let China take all the advantages, because the monopolies commission have no strength to stand up to one country and this should not disadvantage other successful shipbuilding nations.”

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