Japan’s KHI Moves Merchant Ship Construction to China

 

According to a report in Nikkei, KHI will step up commercial shipbuilding in China and scale down production in Japan to improve cost competitiveness as the market rebounds from a yearslong slump.

 

The Japanese firm plans a 50% capacity boost at a shipyard in Dalian, Liaoning Province, that builds mainly large ships, including tankers and bulk carriers. The facility is jointly operated with China Ocean Shipping (Group) Co., also known as Cosco. More than 20 billion yen ($176 million) will be invested at the site, including construction of a second dock about 550 meters long.

 

KHI established a restructuring committee in October 2016 following a slump in the shipbuilder’s Ship & Offshore Structure segment in the past few years, as well as large losses in the past two years.

 

The restructuring committee plans to close one of its two shipbuilding docks in Sakaide. KHI plans to do the same in one of its Chinese joint ventures, Dalian-COSCO KHI Ship Engineering (DACKS). Its other joint venture, Nanjing-COSCO KHI Ship Engineering (NACKS), will maintain its two docks.

 

KHI's  shifting a large part of commercial shipbuilding to China could be a model for other ailing Japanese shipbuilders, points out the report.