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SHIPBUILDING

Japanese Shipbuilders Aim Their Attention on Fuel Efficiency in Order to Regain Market

Japanese shipbuilders, leapfrogged by South Korean and Chinese yards in an industry they once dominated, are counting on fuel-saving technology to help them overcome a stronger yen and high wages.

“There’s a sense of crisis in the medium to long term with the currency,” said Mr Hiroshi Minami, President of Oshima Shipbuilding Co., based in Saikai, Nagasaki prefecture. “We need to focus on more fuel-efficient ships to compete.”

Japan’s backlog for ship orders is less than half the size of both China’s and South Korea’s as prices about 20 per cent higher than in China dent sales in a market worth $ 95 billion a year. Oshima Shipbuilding, Imabari Shipbuilding Co., Japan’s largest shipyard, and other local vessel makers are now backing global fuel-use standards, similar to cars’ mileage ratings, to highlight cost savings for operators as oil prices rise.

“Fuel consumption is what matters,” said Mr Klaus Nyborg, Chief Executive Officer of Pacific Basin Shipping Ltd, whose dry bulk fleet, excluding charters, is almost 90 per cent made in Japan. “It’s the difference between breaking even or making a loss.”

A Japanese Handysize dry bulk ship typically uses about 24 tonnes of fuel a day, compared with 28 tonnes for Chinese-made ones, said Mr Nyborg. That translates into about $ 2,700 a day of cost savings on fuel.

A Japan-made Handysize costs about $ 30 million, compared with $ 25 million to $ 26 million for a Chinese one, according to Rome-based shipowner d’Amico Societa di Navigazione SpA. The price of Japanese-made ships, which is usually quoted in dollars, has climbed as the yen strengthened in three of the past four years.

Japan lost its lead as the world’s largest shipbuilding country by orders to South Korea in 2005 and dropped to No. 3 behind China the following year, figures from Japan’s shipbuilding association show. China took the top spot in 2009 as the government pumped money into shipbuilders to help ensure supplies of raw materials from overseas and to prop up yards during the global financial crisis. Chinese yards also benefited from lower wages.

To help highlight fuel efficiency, Japanese shipyards are backing the global standards set to be discussed next month by the International Maritime Organisation. The United Nations agency’s index will define a minimum efficiency level for various types of ships, that will be raised every five years to encourage improvement.

(eximin)
Japanese shipbuilders, leapfrogged by South Korean and Chinese yards in an industry they once dominated, are counting on fuel-saving technology to help them overcome a stronger yen and high wages.

“There’s a sense of crisis in the medium to long term with the currency,” said Mr Hiroshi Minami, President of Oshima Shipbuilding Co., based in Saikai, Nagasaki prefecture. “We need to focus on more fuel-efficient ships to compete.”

Japan’s backlog for ship orders is less than half the size of both China’s and South Korea’s as prices about 20 per cent higher than in China dent sales in a market worth $ 95 billion a year. Oshima Shipbuilding, Imabari Shipbuilding Co., Japan’s largest shipyard, and other local vessel makers are now backing global fuel-use standards, similar to cars’ mileage ratings, to highlight cost savings for operators as oil prices rise.

“Fuel consumption is what matters,” said Mr Klaus Nyborg, Chief Executive Officer of Pacific Basin Shipping Ltd, whose dry bulk fleet, excluding charters, is almost 90 per cent made in Japan. “It’s the difference between breaking even or making a loss.”

A Japanese Handysize dry bulk ship typically uses about 24 tonnes of fuel a day, compared with 28 tonnes for Chinese-made ones, said Mr Nyborg. That translates into about $ 2,700 a day of cost savings on fuel.

A Japan-made Handysize costs about $ 30 million, compared with $ 25 million to $ 26 million for a Chinese one, according to Rome-based shipowner d’Amico Societa di Navigazione SpA. The price of Japanese-made ships, which is usually quoted in dollars, has climbed as the yen strengthened in three of the past four years.

Japan lost its lead as the world’s largest shipbuilding country by orders to South Korea in 2005 and dropped to No. 3 behind China the following year, figures from Japan’s shipbuilding association show. China took the top spot in 2009 as the government pumped money into shipbuilders to help ensure supplies of raw materials from overseas and to prop up yards during the global financial crisis. Chinese yards also benefited from lower wages.

To help highlight fuel efficiency, Japanese shipyards are backing the global standards set to be discussed next month by the International Maritime Organisation. The United Nations agency’s index will define a minimum efficiency level for various types of ships, that will be raised every five years to encourage improvement.

(eximin)

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