Mitsubishi Heavy Industries Forming Shipbuilding Alliances with Japanese Rivals

Photo: MHI Global

Japanese shipbuilder Mitsubishi Heavy Industries (MHI) says it has reached basic agreements with other domestic shipbuilders on forming alliances in the commercial shipbuilding business.

MHI said agreements were signed with Imabari Shipbuilding and Namura Shipbuilding in the wake of ongoing discussions focused on forming the alliances. MHI is also continuing discussions toward concluding a similar alliance with Oshima Shipbuilding.

The goal of the alliances is to strengthen each partners’ competitiveness within the global shipbuilding market.

“The agreements are targeted at achieving sustained growth through the pursuit of mutually complementary, synergy-generating alliances while respecting each partner’s independence, in an overall effort to strengthen the competitiveness of all alliance partners in the global marketplace,” MHI said in a press release.

The completed basic agreements cover several core issues, including the development of new ship designs and technologies, sharing of designs and workforce, standardization of engineering tools and fitting equipment, and flexible application of each partner’s construction capabilities. It is also expected that separate contracts will be concluded between MHI and each of the partners stipulating how the alliance will be specifically applied to actual business operations.

“Through the conclusion of the new alliances, MHI is looking to enhance business competitiveness around its core engineering strengths cultivated over many years, particularly in the areas of energy-saving and environmental technology. In the process, the Company aims to further boost the presence of Japanese shipbuilders in the dramatically changing global shipbuilding industry,” MHI said.

In 2016, for the first time in nearly two decades, Japanese shipbuilders overtook rivals in South Korea as number two in the ranking of biggest shipbuilding nations in terms of newbuild order backlog. China is still the top shipbuilding country.