Japan revives shipbuilding industry to compete with Korea in US market

In a strategic move to revitalize its shipbuilding industry, Japan has announced the establishment of a national shipyard and plans to merge its leading shipbuilding companies. This initiative comes as Japan faces fierce competition from global giants China and Korea. Analysts emphasize the need for a robust national strategy to enhance Japan’s competitiveness, particularly in the U.S. shipbuilding and maintenance markets.

Government Initiatives to Boost Shipbuilding Capacity

The Japanese government, alongside the ruling Liberal Democratic Party, is spearheading efforts to construct a national shipyard funded by both public and private investments. This initiative aims to bolster Japan’s shipbuilding sector, which has suffered from labor shortages and outdated facilities. Currently, Japan’s shipbuilding market share stands at a mere 7%, significantly trailing behind China’s 71% and Korea’s 17%. The government has set an ambitious goal to double its shipbuilding capacity by 2030, aspiring to capture 20% of the global market.

To achieve this, an estimated investment of approximately 1 trillion yen (around 9.45 trillion won) is required. Major Japanese shipbuilders are also pursuing mergers to enhance their market position. Imabari Shipbuilding, Japan’s largest shipbuilding firm, is in talks to acquire a larger stake in Japan Marine United (JMU), aiming to increase its ownership from 30% to 60%. This acquisition could elevate Imabari’s global ranking from sixth to fourth, surpassing Hanwha Ocean.

Industry experts suggest that this merger is designed to combine the strengths of both companies, with Imabari focusing on commercial vessels and JMU specializing in naval ships. The Nihon Keizai Shimbun reported that a unified management approach could better position the merged entity to meet diverse demands in the shipbuilding sector.

New CO2 Carriers Set for Large-Scale Global Transport by 2028

Challenges Ahead for Japan’s Shipbuilding Sector

Japan’s shipbuilding utilization rate is also concerning. A report by ING SINK revealed that Japan’s order count per yard is significantly lower than that of Korea and China, with Japan averaging just 13.3 vessels per yard compared to Korea’s 70.9 and China’s 21.3. This disparity highlights the challenges Japan faces in revitalizing its shipbuilding industry.

Furthermore, some interpretations suggest that Japan’s revival plan may serve as a strategic move to collaborate with the United States. By strengthening its shipbuilding capabilities, Japan could leverage support for the U.S. shipbuilding industry, particularly in light of import tariff pressures from previous administrations. As Japan and Korea vie for dominance in the U.S. naval vessel construction and maintenance markets, the coming years will be critical for Japan’s shipbuilding ambitions.