Tokyo dishes out cash to entice owners to order new ships

Japan is to increase the amount of state financing it dishes out to owners who choose to order newbuilds at the nation’s hard-pressed yards.

The Yomiuri Shimbun newspaper, citing government sources, is reporting that state financial institutions such as the Development Bank of Japan and the Japan Bank for International Cooperation have been told to up lendings and guarantees to overseas owners in a bid to wrestle back some of the country’s dwindling newbuild market share.

The Maritime Bureau of the Ministry of Land, Infrastructure, Transport and Tourism has also got the 2014-established state-backed vehicle called Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) to stump up cash for foreign owners to order ships in Japan.

JOIN will invest a portion, typically 20%, of its own equity when a shipowner decides to order a ship in Japan via an overseas special purpose company (SPC).

Japan was the world’s largest shipbuilder through to the turn of the century. Its position has been usurped by cheaper neighbours China and South Korea over the past 20 years. Japan’s market share, measured by the amount of shipbuilding orders, dropped to 16% in 2019 from 32% in 2015.

A report from Danish Ship Finance published in May suggested up to 45 Japanese yards could run out of orders in the coming months.

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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