Japan’s Sumitomo Heavy Industries Marine & Engineering has decided to quit commercial shipbuilding.
As one of Japan’s oldest and best-known shipbuilders, the surprise move will be taken as further evidence of the Japanese shipbuilding industry’s decline amid fierce competition from South Korea and China.
Sumitomo said it will no longer take orders from this year but is committed to completing its orderbook of six 115,000-dwt aframax tankers, including one vessel for Alberta Shipmanagement.
It will also continue to provide after-sales service.
Explaining the decision, Sumitomo said it is faced with rising material costs, volatile newbuilding prices and continued intense competition from abroad.
“The company has found it challenging to sustain the shipbuilding business,” Sumitomo said.
Sumitomo’s primary shipyard is located in Yokosuka, Japan, with a shipbuilding legacy dating back to 1897.
Recent newbuilding endeavours have predominantly centred on aframax tankers, establishing a reputation that drew the attention of prominent players in the sector.
Sumitomo’s clients include the likes of Samos Steamship, Wah Kwong Maritime, Thenamaris, Lundqvist Rederierna and Valles Steamship.
But over recent years, the yard has been forced to reduce production capacity as it struggled to make a profit on orders.
It also missed out on consolidation moves in the industry, which left it to fend for itself.
In 2023, it won orders valued at ¥16.96bn ($112m) and made net sales of ¥19.5bn.
Over recent years, other big names in Japanese shipbuilding have also signalled partial or full withdrawal from the market.
Mitsubishi Heavy Industries sold its main Koyagi facility, Mitsui Engineering & Shipbuilding closed its Chiba shipyard and Sasebo Heavy Industries has switched from shipbuilding to ship repair.
Other medium-sized yards have taken advantage of their demise to expand.
Imabari Shipbuilding has become a major shareholder in Japan Marine United and launched joint-venture company Nihon Shipyard.
Tsuneishi Shipbuilding became the majority shareholder in Mitsui E&S.
Earlier this week, TradeWinds reported how Shin Kurushima Dock, which swallowed up Sanoyas Shipbuilding in a takeover, is now planning to expand its shipbuilding facilities.
