Tsuneishi plans to ramp up production to drive growth
Shipbuilder Tsuneishi Heavy Industries (Cebu), Inc. (THI) has projected lower revenues this year due to the weakening of global ship prices and a backlog of orders.
Revenues have been declining since reaching a high of P42.2 billion in 2012.
Akihiko Mishima, newly appointed president of Tsuneishi, said the company’s revenues went down to P30 billion in 2013 and further to P24.56 billion last year.
They expect to earn only P21.1 billion this year, a year-on-year decrease of 14 percent.
Mishima, however, was optimistic that 2015 and the succeeding years hold a lot of promise as the global economy is expected to improve.
The company is preparing to ramp up production at its Balamban shipyard in southwestern Cebu to 25 to 30 ships a year. The Balamban shipyard currently produces an average of 20 ships a year.
To drive growth, Mishima said he will focus on strengthening capabilities and improving cost competitiveness.
Mishima said the Philippines currently ranks fourth in ship production. But the country has cornered only two percent of the global market. The top three producers – China, Korea and Japan – account for about 90 percent.
The Philippines delivered 1,331 ships last year. China built 25,903 ships, followed closely by Korea with 24,504. Japan produced 14,588 ships.
“Ever since Tsuneishi established its shipbuilding site in the Philippines, Tsuneishi has helped propel the growth of exports of Philippine-made ships, contributing to the growth of Philippine shipbuilding,” said Mishima.
In order to grow further, he said he will focus on strengthening capabilities by providing technical training for Filipino employees.
Over the past two decades, he said the company has sent over 1,536 Filipino employees to their shipbuilding center in Japan to acquire additional technical skills.
“Currently there are 224 engineers, skilled workers and administrative staff training in Tsuneishi Shipbuilding-Japan,” he said. The Filipino employees undergo on-the-job-training and learn to speak Nihongo. Engineers and administrative staff train for one year while technical workers train for two to three years.
THI currently employs 13,562 Filipinos, including subcontractor workers and affiliate companies, and 66 Japanese expatriates. Mishima also said the company will have to “make (its) products more distinctive” to get new orders amid the stiff competition from other shipbuilders in Asia.
“This year THI is set to deliver 18 ships but we can produce an average of 20 ships per year. In an effort to strengthen cost competitiveness, we aim to build 25 to 30 vessels per year,” he said.
The 18 ships include three 35,300 deadweight metric ton type bulk carrier, seven 58,000 dwt type, seven 82,000 dwt type and one 180,000 dwt type cape-size bulk carrier. Since it started operations in Balamban in 1994, THI has invested a total of P22 billion and expanded its shipyard to 147 million square meters.
The Tsuneishi Shipbuilding Group caters to customers in Japan, European countries and Asian countries. Roberto Eduardo Aboitiz, a member of the board of directors of THI, said the potential for more shipbuilding activities in the country is huge given the availability of a younger and trainable workforce.
Meanwhile, Tsuneishi Technical Services (Philippines), Inc. (TTSP) is strengthening linkages with the academe to raise awareness about ship design and shipbuilding among engineering graduates.
Segismundo Exaltacion, Jr., newly appointed TTSP president, said they were talking with several universities and colleges including University of San Carlos, University of San Jose Recoletos, Cebu Institute of Technology University, University of Cebu and Cebu Technological University.
“We believe that in order to get the right talents and fuel more growth to the shipbuilding industry, we need to engage them from the source and that is through the academe. We are currently developing a curriculum that will incorporate engineering principles and ship design,” he said.
He added that they have accomplished about 10 percent of their objective and a revised curriculum may happen in two years. Exaltacion said their hiring rate is only 15-20 percent of the 200 to 300 applicants they usually attract.
“We believe the curriculum can help get more ready talents. We intend to hire 20 to 40 engineers every year. This year we are targeting to reach 400 people under TTSP from over 300 we already have onboard,” he said.
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