Japanese Yards Form Alliance

Three major Japanese shipbuilders are forming an alliance on commercial vessels and ocean engineering to survive competition with South Korean shipyards. The three firms -- Ishikawajima-Harima Heavy Industries, Kawasaki Heavy Industries Ltd and Mitsui Engineering & Shipbuilding Co Ltd will cooperate on joint procurement of materials and design skills for building commercial vessels, aiming to cut production costs. They will decide in one or two years whether to spin off their divisions for commercial ships and ocean engineering to form a joint venture, a Kawasaki spokesman said. If they do so, the joint firm's sales are likely to rise to a level equal to that of Mitsubishi Heavy Industries Ltd, spokesmen for the three shipbuilders said. The alliance excludes military ships. Mitsubishi Heavy's parent sales at its shipbuilding division stood at 268.9 billion yen ($2.52 billion), including military ships, in the year that ended in March. Sales at Mitsui's commercial vessel business stood at 60 billion yen in 1999/2000. Kawasaki Heavy's sales at its shipbuilding business including sales of military ships were about 100 billion yen. Those at IHI stood at 124.6 billion yen.