Japanese Companies Moving Aggressively into Global Offshore Plant Market

Japanese shipbuilding companies are shoring up their offshore plant construction business along with floating liquefied natural gas (FLNG) facilities to increase their presence in the market dominated by Korean corporations such as Hyundai Heavy Industries, Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering.

According to the Japanese Marine-Net magazine, Mitsubishi Heavy Industries, Imabari Shipbuilding, and other Japanese shipbuilders are expanding their business into the fields of floating production, storage and offloading (FPSO), drillships, tankers, offshore support vessels, and others.

Their goal is to make inroads into the FLNG market based on the new business. The offshore plant market is showing high growth potentials and very positive profit forecasts these days, drawing the attention of the Japanese corporations. They have won drillship contracts for three to four years and are pretty confident in themselves. The offshore plant market is expected to grow from US$140 billion to US$230 billion between 2010 and 2015, and to US$500 billion by 2030.

Still, experts in Korea say that more time will be taken for them to settle in the market. “Japan’s technological strength and competitiveness in the offshore plant industry are so poor that the country’s global market share is less than 1 percent,” one of them explained, adding, “Japan is rarely capable of building large-scale offshore facilities and lacks the experience in and technology for offshore plant construction.”

At present, Korean, Chinese, Japanese, and Singaporean companies are the major players competing in the drillship market. The race there and in the global offshore plant industry as a whole is likely to heat up with time.