Japanese shipbuilding boss warns nation’s yards are still in crisis mode

The volume of ship orders placed around the world so far this year may well be at highest levels seen since 2014 but Japanese yards are not enjoying these highs.

Chinese and South Korean yards have taken the majority of orders in 2021 so far, each accounting for 46% of the global total in dwt terms, according to Clarkson Research Services.

The head of Japan’s national shipbuilding association has warned his sector remains in crisis.

Shipbuilders’ Association of Japan (SAJ) chairman Saito Tamotsu made the comment during an online news conference on Monday.

Saito said, “Chinese and South Korean shipbuilders secure orders helped by strong government backing. But Japanese companies are struggling, and their backlog of orders is decreasing rapidly.”

SAJ data from the end of April shows the Japanese combined orderbook was only about half compared to five years ago.

Danish Ship Finance warned in a report out earlier this month that the front-loaded nature of the current global orderbook is most severe in Japan, where 95% of the orderbook is scheduled to be delivered by the end of 2022, compared with 73% in China and 60% in South Korea.

SAJ’s Saito urged yards to develop green ships as well as pressing ahead with autonomous technology.

Earlier this month the Diet, Japan’s parliament, passed a number of bills aimed at enhancing the competitiveness of local shipbuilders against rivals in China and South Korea.

Under the revised laws, shipbuilders can get tax breaks, subsidies and low interest loans if the ministry of land, infrastructure, transport and tourism approves their business plans, such as those featuring restructuring measure or investment plans aimed at improving productivity.

Japanese yards, hit hard by cheaper neighbouring countries, have embarked on another big round of mergers in a bid to drive economies of scale.

Japan was the largest shipbuilding nation at the start of the century but has seen its position eroded by China and South Korea over the last 20 years.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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