JFE Holdings Inc. is considering taking over Hitachi Zosen Corp.
's shipbuilding operations, which are now conducted by Universal Shipbuilding Corp.
, a joint venture between the two firms, sources said Saturday.
The deal would mark Osaka-based Hitachi Zosen's effective departure from shipbuilding. It will instead concentrate on its mainline environment equipment and plants business to try to bolster profitability, the sources said.
The acquisition is expected to accelerate reconfiguration of the domestic shipbuilding industry.
Demand for shipbuilding has increased amid the strong global economy. However, domestic shipbuilders face cutthroat competition with South Korean and Chinese rivals as well as deteriorating profitability due to rising materials costs.