According to a report in JIJI Press, Mitsubishi Heavy Industries is considering selling one of its largest shipbuilding plants in Japan to reduce costs.
According to the report , the Japanese conglomerate is weighing the sale of the Koyagi plant in the southwestern city of Nagasaki to Oshima Shipbuilding Co., the third biggest shipbuilder in the country.
With the sale, Mitsubishi Heavy would effectively withdraw from construction of large vessels carrying resources such as liquefied natural gas. The Koyagi plant, founded in 1972, stopped building liquefied natural gas vessels in September this year and now focuses on LPG ships.
Nikkei reported that while shipbuilders in South Korea and China make moves to realign, the Japanese shipbuilding industry is expected to accelerate its own changes.
Although Japanese builders together represent over 20% of the market, there are more than 10 of them, making individual companies hard pressed to compete with larger Chinese and South Korean rivals offering lower prices.
In Japan, Imabari Shipbuilding, the country's top shipbuilder, and second-ranked Japan Marine United announced a capital tie-up deal last month.
Oshima Shipbuilding, based in Saikai, Nagasaki Prefecture, mainly builds bulk carriers. It apparently aims to improve its profitability by acquiring the Koyagi factory, the sources said.