TOKYO, Japan — Kawasaki Heavy Industries will move the majority of its liquefied petroleum gas tanker production to China, slashing costs and boosting its bottom line to better compete with South Korean and Chinese competitors. At the Sakaide Works in Kagawa Prefecture in western Japan, the Japanese shipbuilder now constructs LPG tankers. Nantong Cosco KHI Ship Engineering, or NACKS, an equity-method affiliate and joint venture with Chinese state-owned shipping company COSCO Group, will receive the know-how. The objective is to relocate the majority of the manufacturing process to NACKS by the end of this decade, with the exception of the fabrication of some critical components such as the engine. NACKS hulls will be delivered to the Sakaide Works, where Kawasaki Heavy will outfit them with engines manufactured at its Kobe factory and prepare them for delivery. Following the transfer, Kawasaki Heavy will focus on building liquid hydrogen carriers and other hydrogen-related operations in Japan, in addition to these final touches. As of March, the business has outstanding shipbuilding orders of 104.6 billion yen ($945 million), up 22% year on year. It plans to supply seven LPG tankers over the next two years, up until March 2023, although there are no additional orders for them at the time. It also plans to complete the construction of two submarines by March 2024, however it is uncertain whether the business will be able to win further contracts in the face of increased competition from Chinese and South Korean firms. Instead, the company is concentrating on the hydrogen sector, where it is creating one of the world’s largest models, capable of transporting 160,000 cubic meters of the fuel. In recent years, the worldwide shipbuilding industry has undergone significant change. In 2019, China State Shipbuilding and China Shipbuilding Industry joined to form one of the world’s largest shipbuilding companies. Hyundai Heavy Industries is also in the process of merging with Daewoo Shipbuilding & Marine Engineering in South Korea./n
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