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Saturday, November 18, 2017

KHI to increase new builds in China

November 13, 2017

 ©Akiyoko / Adobe Stock

©Akiyoko / Adobe Stock

Kawasaki Heavy Industries will move more of its commercial shipbuilding operations from Japan to China. It aims to reduce its production in Japan from 40% of all builds to 25% in a bid to increase profitability. 

 
The company currently operates a shipyard outside Shanghai in a 50-50 partnership with China's Cosco Shipping. The shipyard, Nantong Cosco KHI Ship Engineering, is located in Jiangsu Province along the Yangtze River and is much larger than Kawasaki's Japanese facitlity. 
 
The Chinese shipyard is a more efficient production hub with a better layout and larger facilities which has allowed production of more than a hundred ships since it opened in 1995. Nantong Shipyard was responsible for building China's first large container ships and super large tankers. 
 
The plan comes after two straight years of posting losses which resulted in a reform committee being set up and the decision was made to move production to China. The shipyard has also decommissioned one of its two docks at their facility in Kagawa Prefecture. These moves come in preparation of reducing domestic capacity by 30%, 
according to Nikkei Asian Review.
 
The company has also hired specialized designers at their China facility to further increase efficiency.
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