Japan yards team up for OOCL bids

JAPANESE shipbuilders are linking-up with foreign yards to chase a major container-ship deal planned by Hong Kong-based Orient Overseas Container Line (OOCL) in a bid to overcome currency problems.

Bidding groups have been formed with builders in South Korea, Taiwan, and Brazil to help counter the competitively damaging effect of the rising value of the yen against the US dollar, Lloyd's List reported.

Up to six 4,800 TEU-capacity, wider-than-Panamax container ships are contemplated. At prevailing market prices, the series could be worth between US$500 million and $550 million.

The alliances formed so far are: Mitsubishi Heavy Industries has teamed-up with Samsung Shipbuilding of Korea.

Kawasaki Heavy Industries has formed a joint bidding group with Taiwan's China Shipbuilding Corporation (CSBC).

Ishikawajima-Harima Heavy Industries is acting in conjunction with its Brazilian subsidiary Ishibras.


It is understood that Polish and Spanish yards also have made approaches to OOCL in connection with its liner fleet modernisation programme.

But a stiff challenge for the project is posed by Howarldtswerke-Deutsche Werft (HDW) in conjunction with Daewoo Shipbuilding.

The German-Korean alliance already has shown its mettle by landing a six-ship series of post-Panamax container vessels for American President Lines (APL).

The APL series and envisaged OOCL ships appear to be a similar breed, given a common 4,800-TEU rating and a beam measurement outside Panama Canal constraints.


The two carriers collaborate in certain fields of transpacific trade.

The Hong Kong-domiciled carrier wants to have the new series in operation by the second half of 1995.


The Tung Group company's previous ship-building programme saw the delivery in 1989 of the 3,600_TEU OOCL Honour and OOCL Hope from CSBC in Taiwan.

South Korean yards' participation in two of the four international bidding consortiums underscores the industry's increasingly high profile in deep-sea, container-ship design and construction.

South Korean ship-builders have gained market share this year, primarily at the expense of the industry in Japan.


But there is evidence of keener price competition emanating now from Japanese builders, which are looking beyond technology-led means to narrow the dollar-equated cost-gap.

Increased overseas sourcing of materials and equipment and greater reliance on foreign sub-contractors form part of the new strategy.

The wider-than-Panamax 4,800-TEU size is emerging as an identifiable category, following orders this year by Japanese carriers Mitsui OSK Lines (MOL) and NYK Line and US inter-modal operator APL.


The strength of the yen has forced Japanese ship builders and owners to look closely at ways of cutting costs.

For example, the yards are planning to increase imports of equipment.