Mitsubishi Heavy Mulling Sale of Shipbuilding Plant in Nagasaki

Economy

Tokyo, Dec. 13 (Jiji Press)--Mitsubishi Heavy Industries Ltd. <7011> is considering selling one of its largest shipbuilding plants in Japan to reduce costs as it faces tough competition from Chinese and South Korean rivals, informed sources said Thursday.

The Japanese company is weighing the sale of the Koyagi plant in the southwestern city of Nagasaki to Oshima Shipbuilding Co., the third biggest shipbuilder in the country, the sources said.

The move could accelerate the realignment of the Japanese shipbuilding industry after Imabari Shipbuilding Co. and Japan Marine United Corp., the largest and second largest shipbuilders in the country, last month announced a basic agreement to form a capital and business partnership.

The Koyagi plant, founded in 1972, stopped building liquefied natural gas vessels in September this year and now focuses on liquefied petroleum gas ships.

Mitsubishi Heavy apparently thinks it is unlikely to see improved profitability in the gas ship business where competition with Chinese and South Korean rivals is especially fierce, the sources said.

[Copyright The Jiji Press, Ltd.]

Jiji Press