Hakodate Dock plans to increase shipbuilding capacity by more than 50% by reopening an idle dock with government support, the president of the northern Japanese shipbuilder said in an interview.
The expansion would restore a dock that fell out of use after demand dropped following the oil shocks of the 1970s. The remarks aired on NHK WORLD-JAPAN NEWS in “Japanese shipbuilding aims for comeback,” published Oct. 22.
The Japanese government announced in September that Hakodate Dock and its parent company would receive subsidies of up to 49.9 billion yen, or $315 million, over the next decade. The support forms part of a $2 billion government package for eight shipbuilding groups.
Hakodate Dock builds bulk carriers, ships that transport unpackaged cargo such as coal and grain, with capacity for up to 40,000 tons, NHK reported. Its customers include buyers in Taiwan, Singapore and Hong Kong, and its order book covers the next four years.
The president said exchange rates have a large effect on the business because many new vessels go to overseas buyers. He expected favorable conditions for new shipbuilding to continue for some time.
The company intends to drain seawater from its former number four dock and return it to production. The structure, once capable of building large tankers, now serves only to hold ships.
“Our mission is to deliver high-quality competitive vessels precisely when customers need them,” the president said.
The expansion faces an unresolved staffing problem. Hakodate Dock estimates it will need another 200 to 300 workers to achieve the planned increase in production, but it has yet to establish a clear recruitment plan.
Japan's shipbuilders depend heavily on skilled manual workers, and labor shortages are growing across the industry. Government funding leaves open whether companies can hire enough people to carry out their expansion plans.
The push also reflects Japan's reliance on shipping for more than 99% of its imports and exports. Domestic shipbuilding capacity no longer meets the country's demand, and more than 30% of new ship orders go to Chinese builders.
Japan's share of the global shipbuilding market has fallen from more than 50% to around 10%, placing it behind China and South Korea.
Mitsubishi Heavy Industries announced plans this week to restart shipbuilding facilities in Okayama Prefecture next fiscal year. Hakodate Dock also repairs vessels for Japan's Self-Defense Forces and Coast Guard and maintained the U.S. Navy minesweeper Warrior in September.
The United States and Japan signed a memorandum on shipbuilding cooperation during President Donald Trump's visit to Japan last year. Washington seeks Japanese investment and technology to rebuild its industry. China accounts for around 70% of global shipbuilding capacity, compared with a U.S. share close to zero.
