A century of shipbuilding

In recent years, we have seen regional peers copying and replicating the manufacturing processes of Monozukuri at a lower cost. How can Japan compete against its regional peers like China and South Korea?

There are many things that distinguish our products from Chinese or Korean products. However, I believe that the most important thing is the fact that our goal is always to keep a good and stable relationship with our customers. Our philosophy isn’t to only focus on immediate profit, because we want a fruitful and healthy relationship with our customers. The average company here in Japan has a history of 23 years. However, when we analyse Tsuneishi Group, we can notice that our shipping operations began 115 years ago, and our shipbuilding operations began 101 years ago. This is the proof that keeping a healthy relationship with our partners is the key to success.

As a company that has expanded within Asia, can you tell us more about the positive synergies that your regional expansion has created?

Firstly, it is a big advantage for us because the exchange rate is in dollars. However, shipbuilding is a global business, so it would be a mistake to uniquely focus on the Asian market. The advantage we have of having operations in the Philippines are the following: Firstly, as I mentioned before, the exchange rate. Secondly, the cost competitiveness. Building a ship in the Philippines or in China is better in terms of cost competitiveness. Thirdly, the people. We always train people from the Philippines in Japan, for a period of 3 years. After that period, some will return to the Philippines to our Cebu plant.

What are some of the main trends experienced in the shipbuilding industry and how is your company adjusting to these trends?

Japan has 20% of the business, and is the 3^rd largest market behind Korea and Japan. In the shipbuilding industry, the market is really unpredictable. One feature of this industry which is quite unique is the length of the process. From the signature of a contract to the delivery of the ship, it takes 2 to 3 years.

Here at Tsuneishi Shipbuilding we have three main categories of ships: bulk carriers, container carriers and tankers. The advantage of having these three categories is that when one is underperforming, the other segments can compensate. In addition, because of the constant fluctuation in the exchange rate, manufacturing more ships abroad is our solution. As I mentioned earlier, it takes 2 to 3 years to build a ship. In that sense, we have a team of market researchers who analyse the worldwide trends, in order for us to be able to anticipate our customer’s desires. We have two major brands here at Tsuneishi Shipbuilding. The first one is our bulker TESS – which stands for Tsuneishi Economical Standard Ship, which has a deadweight tonnage of 40 to 60 thousand tons. Throughout the years, we have sold over 400 of these ships. The other brand is KAMSARMAX, which weighs 80 thousand tons. We have sold over 300 of these ships to customers all around the world. Until then, the standard length for bulkers was of 225 meters, however, following a survey from our market research team, we found out that the actual maximum length to enter the Kamsar port in Guinea, which is often used in the transport of bauxite, was 229 meters. This discovery lead to the creation of the KAMSARMAX series. The fact that it is 4 meters longer than other ships allows it to carry more merchandise which is the reason behind its success.

Could you please highlight the key milestones of your company?

Tsuneishi group started its shipping operations in 1903.  The shipbuilding activities started in 1917, meaning last year marked our 100^th anniversary. Not many companies have overseas shipbuilding operations, but we have been present in the Philippines since 1994. In Shanghai, we started operations in 2003 with the creation of Tsuneishi Group Zhoushan Shipbuilding Inc. In addition, we also started operations in Paraguay in 2008, building different kind of barges for river transport.

How is your company contributing to creating an greener world?

In the shipbuilding industry, there are two distinctive features that we take into account. The first one is saving energy. Our target here at Tsuneishi Shipbuilding is to reduce Co2 emissions by 40% by 2020 in comparison to 1990. We are currently at about 30%, but we aim for the 40% reduction.

Both domestically and abroad, your company faces tough market competition, with industrial giants and local competitors also wanting to get their slice of the pie.
What are the competitive advantages of Tsuneishi Shipbuilding?

Firstly, we take customer satisfaction extremely seriously. Secondly, as I’ve mentioned before, we undertake extensive market research in order to be up to date with the latest trends, and to be able to identify the customers needs immediately. In addition, one of our advantages at Tsuneishi Group is that we offer shipbuilding and shipping operations. This is of course a huge advantage.

At the eve of the 4^th Industrial Revolution, many industries are experiencing tremendous changes due to innovative technologies, such as factory automation, IoT and AI. Do you utilize such technology here at Tsuneishi Shipbuilding?

We are currently partnering with different universities in order to start using robots in our shipbuilding operations. For example, we have been collaborating with Hiroshima University since 2004 and Carnegie Mellon University in American. We also are collaborating with Kyushu University in order to develop laser-arc hybrid welding.

Throughout the years, your company has expanded beyond the Japanese border. Today, we can find your group all throughout Asia, with subsidiaries in the Philippines, China and Singapore. What regions have the highest growth potential and why?

As I mentioned before, the shipbuilding industry fluctuates very rapidly. However, the ASEAN region has huge potential. Take Indonesia for example, with its 17,000 islands, or the Philippines with its 7,000 islands. All these countries are going to need ships once they have developed their infrastructure.

What will be your mid-term strategy to pursue corporate growth?

I believe that listening to our customers and being able to build the ship that will satisfy them is essential to build a long and fruitful relationship with our clients, and therefore to continue corporate growth. I am very proud that our vessel, the TESS and the KAMSARMAX are becoming references in the world.