12th JECKU Top Executive Meeting
27th, October, 2003
On October 23, 2003, altogether 60 shipbuilding leaders including the top executives of major shipyards in Japan, Europe, China, Korea and the United States gathered in a hotel commanding a view of the Osaka Castle (in Osaka City, Japan) to hold the 12th JECKU Top Executive Meeting, hosted by the Japanese delegation.
At this Osaka meeting, the participants shared the perception of the existing environment of the shipbuilding industry and the following view in pursuit of making the world shipbuilding a more attractive industry from business leaders’ point of view.
At the 11th JECKU meeting held last fall in Korea, pessimistic views dominated in respect of the future of the global shipbuilding market, but immediately thereafter, a major change in the environment of the shipbuilding industry took place. The seaborne dry bulk trade showed a significant expansion, supported by a brisk steel demand from China, and on the other hand there is an urge to advance the phase-out schedule of single-hull tankers, triggered by accidents involving oil spills from tankers.
Thanks to the buoyant shipping market and the low level of interest rates, many shipyards today have well-filled orderbooks. However, the level of shipbuilding prices, though basically showing improvement, is still weak in picking up, compared with the marked upturn of the shipping market.
Since shipbuilders serve a single worldwide market, and shipbuilding prices are U.S. dollar based in most contracts, shipyards could suffer a substantial impact if its national currency appreciates relative to the dollar.
For shipbuilding business leaders, it is an important task to secure sufficient workload in the short-term, but it is even more important to customize their business judgement in alignment with market factors relevant to shipbuilding, such as shipping and exchange rate trends, enabling calm judgment in a medium to long-term perspective.
Shipbuilders in the world, though rivals to one another, should endeavor to develop an environment in which they can compete with one another on a level playing field. As one of the means to achieve it, a new OECD agreement should be formulated through such exhaustive discussions as to convince every shipbuilder.
The participants also shared the recognition of the need to jointly address the problems shipbuilders are confronted with today in the increasingly complex business environment.
This annual JECKU meeting, in which top shipbuilding leaders meet one another face to face to review the market in which they operate, has been making very meaningful contributions to the fostering of mutual trust among them and should be continued.
We have been advised that the next 13th JECKU Top Executive Meeting will be held in Brussels, 13-15 October 2004, and all the participants promised in adjourning this year’s meeting that that they will see one another again on that occasion.
23th October, 2003
Mototsugu Ito
Chairman of The Shipbuilders’ Association of Japan
(President of Ishikawajima-Harima Heavy Industries Co., Ltd.)