Kawasaki Heavy Industries Ltd. said Wednesday it will spin off its shipbuilding and precision machinery operations in October.
The move is aimed at creating speedier and more flexible management, the company said.
Kawasaki Heavy's shipbuilding operations will be spun off into a wholly owned company based in Kobe, with about 1,750 employees.
The new company, tentatively named Kawasaki Shipbuilding, will design, build, market and repair ships and marine equipment. It hopes to have sales of around 90 billion yen in the first year.
Meanwhile, Kawasaki will merge its wholly owned subsidiary Kawasaki Hydraulics Co. with a new company, which will also be 100 percent owned and located in Kobe.
Tentatively called Kawasaki Precision Machinery, the company will design, manufacture and market hydraulics, machinery and control systems for ships.
With a workforce of around 670, the company will target sales of around 34 billion yen in the first year.
The size of the capital for both companies has yet to be decided, company officials said.