Kawasaki Heavy Industries is dramatically overhauling its traditional shipbuilding business, shifting a large part of commercial shipbuilding to China in what could be a model for other ailing Japanese shipbuilders.

The main goal of Kawasaki's reorganization is to make better use of its shipyard in China, which is larger than its facilities in Japan, and better laid out, allowing for more efficient shipbuilding. Domestic production will be reduced to around 25% from 40%, with China picking up the rest.

Kawasaki Heavy Industries seeks anchor for shipbuilding unit in China

Located in a vast area along the Yangtze River in Nantong, Jiangsu Province about 130km from Shanghai, is Nantong Cosco KHI Ship Engineering, or Nacks, a 50-50 joint venture between China Cosco Shipping and Kawasaki Heavy.

Nacks has a proven track record of building state-of-the-art car carriers and other ships. It has built more than 100 ships since its inception in 1995, including China's first super-large tankers and large container vessels.

Shipbuilding processes are arranged according to workflow, from the delivery, cutting and processing of steel plates to parts manufacturing, assembly and coating of hull blocks and welding at the docks.

Nacks' clean layout is a marked contrast to Japanese shipyards, where processes are often separate from one another as equipment has been added gradually in confined spaces.

Nacks' productivity is symbolized by the assembly yard next to a 500-meter dock, where super-large hull blocks are assembled in a large area about the size of a dock 80 meters wide. The blocks are then loaded into the hull space using two portal cranes.

"We can speed up the overall shipbuilding time by increasing the workload outside the dock," said Masakazu Kusuyama, vice president of Nacks.

Kawasaki Heavy was founded in 1878, when Shozo Kawasaki opened a shipyard in Tokyo's Tsukiji district, which is famous today for its fish market and sushi restaurants.

Japan once accounted for half of the tonnage of global shipbuilding, but now accounts for only about 20%. Only a few attempts have been made to move production overseas, unlike other industries, due to the fact that Japan's shipping-related industries are knit closely together in "clusters," including marine equipment manufacturers, steelmakers and financial institutions that provide the funding. But that may need to change if the industry is to survive and succeed.

Source: NIKKEI