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.