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Opportunities For Cooperation Between U.S. And Japanese Marine Equipment Manufacturers

More than 800 companies manufacture marine equipment in Japan. They range from large, vertically integrated firms that build ships and machinery, to small companies that specialize in niche areas. Their combined annual sales exceed $800 million.

Japanese companies have established a reputation for producing top-quality, state-of-the-art marine machinery and systems.

Interestingly, Japanese marine equipment manufacturers have derived almost 80 percent of sales from their local market over the past 10 years. They have been generally satisfied with the level of business generated by Japanese shipbuilders. And why not, given the enormous share that Japan has had in the worldwide shipbuilding market? But things have changed. The yen has appreciated to a point where Japanese shipbuilders are trying to find dollar-based sources of supply to contain rising ship construction costs. This has placed Japanese suppliers in the role of competing with foreign sources for equipment orders from Japanese shipbuilders.

This situation produces some very interesting opportunities for U.S. companies willing to invest marketing and engineering resources to position themselves in the Japanese shipbuilding market. The most obvious possibility is to become a supplier to Japanese shipyards. Another possibility is to subcontract with established equipment suppliers in Japan to manufacture components, and in effect "dollarize" a portion of the final product. Is it realistic to try to enter the Japanese marine market? This is a question most will ask, and appropriately so, given the relative experience of U.S. and Japanese companies in the commercial marine market.

IMA thinks the answer is clearly yes. Our recent work with Japanese and U.S. companies indicates that it is possible to identify business opportunities where both parties can mutually benefit from collaboration. We have found situations where a Japanese shipbuilder or equipment supplier could lower its cost by subcontracting to a U.S. company, and the latter could gain access to new market opportunities. We have found opportunities where military-origin technology of a U.S. firm could be commercialized through association with a company active in the Japanese marine sector. We have also identified opportunities where the U.S. company would provide access to new markets for the Japanese partner. U.S. and Japanese marine equipment manufacturers should look carefully at the possibilities for cooperation. Timing is right, and both can benefit.

 
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