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Worse? Japanese shipyards may "leak" Chinese orders

The impact of the new coronavirus epidemic has brought opportunities for "leakage" to Japanese shipping companies. Japan's Mitsubishi Heavy Industries is expected to take over the cruise ship maintenance project originally planned by foreign shipowners in Chinese shipyards. The virus epidemic has also made China's shipyards worse. When facing delays in delivery, they will also face the crisis of receiving orders.

Due to the continuous escalation of the new coronavirus epidemic, Shanghai has postponed the rework time to February 10, and the short-term resumption time of the ship repair yard will be affected. It will be difficult to recruit workers and rush work, and shipowners will have to face possible delays.

Recently, the director of Mitsubishi Heavy Industries Nagasaki Shipbuilding revealed that due to the epidemic, an Italian cruise company previously planned to repair an 86,000-ton cruise ship in Shanghai, China, but has now considered transferring the repair work to Japan and is negotiating with Mitsubishi Heavy Industries.

If the contract can be signed, this will be the first maintenance project undertaken by Mitsubishi Heavy Industries since it proposed to build Nagasaki Shipbuilding as a cruise repair base last summer.

According to the director of Nagasaki Shipbuilding, to carry out comprehensive repairs, the corresponding infrastructure must be established; but if it is a small-scale work that only takes one to two weeks, it can be handled immediately.

Mitsubishi Heavy Industries has been hoping to cooperate with Nagasaki City to use the Nagasaki Shipyard in Nagasaki City as a maintenance base for large cruise ships and provide maintenance services for large cruise ships in the port of Nagasaki. Mitsubishi Heavy Industries hopes that by attracting cruise ship repair business to Japan, it will eventually achieve a positive economic impact on the shipbuilding industry.

Currently, Singapore's cruise repair base has always been centered on Singapore. However, Mitsubishi Heavy Industries believes that Nagasaki Shipbuilding and Nagasaki Port have a distance advantage for cruise lines. For example, returning to Singapore from Shanghai takes 12 days, but calling in Nagasaki takes only one-sixth of the time, which can reduce downtime. The Nagasaki Port Cruise Terminal is adjacent to Mitsubishi Heavy Industries Nagasaki Shipyard, so the ship can be repaired within 1-2 weeks after passengers landed.

Mitsubishi Heavy Industries has previously built luxury cruise ships. According to the International Ship Network, the "Diamond Princess" and the "AIDAperla" under the Aida Cruise Line have both been built by Mitsubishi Heavy Industries Nagasaki Shipbuilding. However, Mitsubishi Heavy Industries reworked a lot during the construction of two luxury cruise ships. Both of them suffered severe fires, failed to deliver the ships on time and caused huge losses, and eventually led to the withdrawal from the cruise construction market and readjusted their business scope.

In 2018, Mitsubishi Heavy Industries Group split the shipbuilding business and established two new companies. Among them, Mitsubishi Shipbuilding (Yokohama City) has positioned Nagasaki Shipbuilding as an LNG ship base and Shimonoseki Shipbuilding as a cargo ship base such as a car carrier. However, due to the exhaustion of long-term orders, how to maintain the utilization rate of shipyards has become a major problem, and the transition to maintenance terminals is one of the options.