[THE INVESTOR]  Stemming oversupply is key to overcoming the shipbuilding industry’s difficulties, according to global industry leaders.

Speaking at the meeting of shipbuilders’ CEOs from Japan, Europe, China, Korea and the US (JECKU), industry leaders pointed to regulation and oversupply as key factors in the current difficulties, and that recovery will take some time.

“In the recent few years, a much larger number of ships have been built than the increase in the volume of shipping, this oversupply is delaying the market’s recovery,” Shigeru Murayama, chief of Kawasaki Heavy Industries and the president of Japan’s shipbuilders’ association, said. 





“Even now, the supply is increasing faster than the demand, a very long time will be needed for complete recovery of the market.”

Saying that Japan has experienced two massive restructuring phases in the past, he went on to urge the gathered industry leaders to estimate future supply and demand and to maintain their businesses at a suitable scale.

Korea Offshore and Shipbuilding Association chairman and Samsung Heavy Industries CEO Park Dae-young also said that the demand is not recovering.

“The slow growth of the global economy is having a negative effect, and oil prices that have fallen short of expectations despite OPEC’s agreement to cut production is failing to raise demand (for ships),” Park said.

Saying that orders placed during the first nine months of the year fell more than 70 percent compared to the average of the recent five years, Park said that political events, and protectionism in major economies will add to the uncertainties the industry is facing.

By Choi He-suk (cheesuk@heraldcorp.com)