Kawasaki Heavy Industries will shift most of the production process for liquefied petroleum gas tankers to China, cutting costs to better compete with South Korean and Chinese rivals and to boost its bottom line.
The Japanese shipbuilder currently builds LPG tankers at its Sakaide Works in Kagawa Prefecture in western Japan. It will transfer the know-how to Nantong Cosco KHI Ship Engineering, or NACKS, an equity-method affiliate and a joint venture with Chinese state-owned shipping company COSCO Group.
The plan is to move most of the building process, barring the production of certain core components like the engine, to NACKS possibly by the end of this decade. Hulls made by NACKS will be sent to the Sakaide Works, where Kawasaki Heavy will equip them with engines made at its Kobe plant and ready them for delivery.
In addition to these final touches, Kawasaki Heavy will focus on building liquid hydrogen carriers and other hydrogen-related operations in Japan following the shift.
The company had 104.6 billion yen ($945 million) in outstanding shipbuilding orders as of March, up 22% on the year. It is slated to deliver seven LPG tankers in the two years through March 2023, but has no other outstanding orders for them as of the moment.
It is also set to finish building two submarines by March 2024, though it is unclear whether the company can win new contracts amid growing competition from Chinese and South Korean players.
The company is instead shifting its focus to the hydrogen sector, and is developing what would be one of the biggest models in the world capable of carrying 160,000 cu. meters of the fuel.
The global shipbuilding industry has gone through major restructuring in recent years. China State Shipbuilding and China Shipbuilding Industry merged in 2019 and became one the world’s top players. South Korea’s Hyundai Heavy Industries is also working on a merger with Daewoo Shipbuilding & Marine Engineering.
Source: Nikkei