Kawasaki Heavy cuts down domestic shipbuilding business

Sarah Carter
Sarah Carter

03 April 2017


Japan’s shipbuilder Kawasaki Heavy Industries (KHI) is drastically reducing domestic shipbuilding business. According to a report in Nikkei, KHI is downsizing its struggling ship and offshore structure operations in Japan by around 30%. As a part of segment restructuring plan, the Tokyo-based group informed about the possibility of withdrawing from shipbuilding or partnering with other players. The company may one of the two docks at the company's mainstay Sakaide works in Kagawa Prefecture around fiscal 2020. KHI is expected to reduce the roughly 2,500 employees in related operations through attrition by retirement, scaling back hiring and reassigning workers to other divisions. In October last year, the company said it would consider a drastic revision of its shipbuilding business due to its worsening profitability and indicated that it may pull out of the business. The decreasing number of orders and low profitability in the shipbuilding sector and stronger currency seriously hurt the finance statement of the Japanese shipyard and caused disappointing forecasts.