Shipbuilder Kawasaki Heavy Industries Ltd. plans to construct gas carriers abroad as it strives to lower costs and take back market share from Korean rivals.
At present currency levels, the company’s Chinese ventures are more cost competitive than Korean shipyards, Akio Murakami, head of Kawasaki Heavy’s shipbuilding and offshore division, said in an interview in Tokyo.
“Our Chinese venture, Nacks, has built a variety of vessels so far, and LNG and LPG carriers are the only area that has yet to be addressed,” Murakami said in the June 13 interview, referring to liquefied natural gas and petroleum carriers. “Once we get the first contract and deliver a quality vessel, many orders will follow.”
Kawasaki Heavy, based in Kobe, estimates costs at its Chinese facilities are as much as 20 percent lower than at Korean yards, Murakami said.
Kawasaki’s push reflects the broader challenge facing Japanese shipbuilders to win back contracts from Korean rivals, who currently control about 80 percent of the market for LNG vessels. In the midst of Japan’s needs for cheaper energy after the 2011 Fukushima nuclear disaster, Kawasaki and other domestic shipbuilders are counting on upcoming contracts for gas carriers to ship gas from U.S. shale gas projects.
Japan’s four major shipbuilders including Kawasaki have together bid to build vessels that will carry LNG from the Cameron terminal in Louisiana when shipments begin in 2017, Murakami said. Mitsui & Co. plans to secure 10 LNG tankers for the project, he said. The yen has weakened 15 percent since the end of 2012, the most among the Group of 10 currencies. Shipyards in Japan now have a more equal footing against Korean rivals after seeing contracts go elsewhere when the yen was stronger, Murakami said.
Kawasaki saw 6 percent of its sales come from its ship and ocean unit last fiscal year. It has diversified operations to areas including high-speed trains, fuselage parts for Boeing Co.’s 787s and Ninja motorcycles.
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