April 8, 2008

Japanese shipbuilding integration picks up pace

Japan's JFE Holdings Inc. and IHI Corp. have agreed to start detailed talks on integrating their shipbuilding businesses to cope with fierce competition with South Korean and Chinese rivals.

The integration would create the largest shipbuilding group in Japan with a domestic market share of about 20 percent in terms of tonnage produced. Current industry leader is Imabari Shipbuilding Co., based in Imabari, Ehime Prefecture, western Japan.

JFE and IHI plan to set up a joint committee later this month to discuss details of the planned integration of their Universal Shipbuilding Corp. and IHI Marine United Inc.

The committee will be headed jointly by Yoshinori Imashimizu, president of Kawasaki, Kanagawa Prefecture-based Universal Shipbuilding, and Shin Takeuchi, president of Tokyo-based IHI Marine United.

The integration has long been predicted. Today's disclosure follows last month's acquisition by JFE of part of Hitachi's stake in Universal Shipbuilding, set up in 2002 as a fifty-fifty joint venture between the JFE group and Hitachi Zosen Corp.