Mitsubishi Heavy Industries (MHI) will reorganise its production structure for shipbuilding, which is currently undertaken at the company's three shipyards in Nagasaki, Shimonoseki and Kobe in Japan.
Under the reorganisation, commercial vessel construction activities will be concentrated at the Nagasaki and Shimonoseki shipyards, while the Kobe shipyard will primarily be dedicated to the construction of submarines.
The company attributes the reorganisation to the rapidly shrinking shipbuilding market, mainly due to the impact of the global economic crisis and a widening gap between demand and supply of new ships.
"Amid this business environment, MHI… aims to shift production to higher value-added products and establish a slim but solid business structure able to endure demand fluctuations," said the company in a statement.
The reorganisation will be progressively implemented toward a target date of mid-2012, when construction of commercial vessels already on order with the Kobe shipyard will be completed.
Containers, carriers and tankers have been suffering considerable overcapacity, said the company. In addition, global shipbuilding capacity has been expanding significantly, mainly in China and Korea, in response to the shipbuilding bubble of the past several years. This is resulting in a wide gap between ship demand and supply.
MHI will accelerate development of new business areas such as floating production, storage and offloading units for liquefied natural gas and dedicated vessels for offshore wind farm installations, in addition to large cruise ships exceeding 100,000 tonnes.