Bloomberg reported that JFE Holdings and IHI Corp. will seek to increase sales of their combined shipbuilding units by about 30 percent in five years to fend off competition from South Korean and Chinese rivals.
The units, set to be merged on October 1, will target annual revenue of $6.2 billion by 2017, said Shinjiro Mishima, who will be president of the new entity. The company will speed up development of fuel-efficient and cost-competitive ships, including on container vessels, bulk carriers and oil tankers, he said.
Combining JFE’s Universal Shipbuilding and IHI Marine United Inc. will create Japan’s biggest shipbuilder, which will challenge larger rivals, including Hyundai Heavy Industries Co., the world’s largest. Japanese shipbuilders are struggling, as slowing economies sap demand for new ships, and a rising yen makes locally built ships more expensive than vessels made in South Korea and China.