The race to dominate shipbuilding is driving a consolidation wave among top-producing nations — with major heavyweight mergers underway in South Korea and Japan. This comes as China’s top two competitors see a narrow opening to shake its market dominance amid a US crackdown on Chinese-built vessels.

Competition in numbers: Japanese and South Korean shipyards have built about a third of the world’s operational fleet capacity in terms of tonnage — though China currently dominates in terms of future orders, with a 70% market share.

Over in South Korea, HD Hyundai Heavy Industries (HHI) announced last week it will merge with its affiliate — HD Hyundai Mipo Dockyard — to boost its production of LNG vessels, icebreaker ships, and naval carriers, Splash247 reported. The move appears to be partly aimed at the US market, as demand for naval and arctic ships rises.

HHI is also consolidating its global operations, with the launch of a new Singapore-based subsidiary that will oversee the company’s shipyards worldwide, including in Vietnam and the Philippines, Splash247 reported.

Meanwhile, Japan’s top producer Imabari Shipbuilding is working to acquire 60% of Japan Marine United — a merger that could create the world’s fourth-largest shipbuilder, Financial Times reported last month. The Japanese government also announced a USD 7 bn public-private fund to modernize existing shipyards and build new ones.

China has its gears up too…: China State Shipbuilding Corp. (CSSC) — the world’s largest shipbuilder — is in the final steps of acquiring its local competitor, state-owned China Shipbuilding Industry Corp. (CSIC), Business Insider (BI) reported earlier this month. The move will help China’s state-controlled industry consolidate and expand operations while cutting costs and boosting efficiency.

…and is likely to remain on top: The merger is set to make CSSC “the largest listed shipbuilding company in the world by a considerable margin, in terms of both assets and revenue,” Matthew Funaiole, senior fellow at the Washington-based Center for Strategic and International Studies, told BI. It will also have the “full backing of the Chinese state and its industrial policy," he added.

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