Mitsui E&S and Tsuneishi to operate jointly in shipbuilding

Japanese shipbuilder Mitsui E&S Holdings is in discussions with compatriot Tsuneishi Holdings to form a shipbuilding tie-up, at a time when the domestic industry is struggling to compete with Chinese and South Korean rivals.

The two companies have announced an agreement to start discussions. Under the plan, Tsuneishi will acquire a minority stake in Mitsui E&S Shipbuilding, a wholly owned subsidiary of Mitsui E&S. The two sides expect to reach an agreement by yearend, with details such as investment ratios to be ironed out later.

Combined, Mitsui E&S and Tsuneishi would be Japan’s third-largest shipbuilding group by volume of commercial-vessel construction. That would surpass Kawasaki Heavy Industries, while top-ranked Imabari Shipbuilding is in investment talks with second-ranked Japan Marine United.

Mitsui E&S and Tsuneishi in 2018 entered into an operational tie-up involving ship design and parts procurement. Capital ties would make way for deeper business collaborations, such as joint shipbuilding orders.

Currently, Mitsui E&S ranks No. 8. Although the company got its start in the shipbuilding industry, the business generated sales of 115.1 billion yen ($1.09 billion) in fiscal 2019 — just 15% of the holding company’s consolidated sales.

Tsuneishi, a privately held group headquartered in Hiroshima Prefecture, is the parent to Japan’s fourth-largest player, Tsuneishi Shipbuilding. The group is strong in constructing bulk carriers, and the shipbuilding business took in sales of 164.6 billion yen in fiscal 2019. Tsuneishi has shipyards in China and the Philippines as well.

For more information visit www.tsuneishi.co.jp

4th August 2020