JECKU Chairman’s Note 2019

Global Shipbuilders united in callfor rationalisation of maritime business
The 28th JECKU Top Executive Meeting was held in Viareggio, Italy on 24 October,
2019, attended by more than 83 Presidents, CEOs and other high level
representatives from major shipbuilders in Japan, Europe, China, Korea and theUnited States.
In addition to the traditional JECKU Agenda with reports by each of thedelegations on shipbuilding and economy in their respective regions, andindividual market briefs by ship types and so on, the attendees engaged inconstructive reflections on some of the structural challenges in the industry.
These resulted in the following shared assessments:
Ships are magnificent products created by ingenuity and passion. Shipbuilders
around the world cherish their profession and are rightfully proud of impressive
technical achievements realised on a daily basis. However, at the same time
global shipbuilders share awareness of a profound lack of rationality in theindustry. For more than one decade, the global shipbuilding market has been
suffering from poor trading conditions. Softer demand has pushed prices
downward and shipyards have accepted numerous contracts at unsustainable
prices. Major shipbuilding price indexes have shown a drop of more than 30%
from their peak while production costs have steadily increased in parallel. Theviews maintained by the leaders of the shipbuilding industry in the past years
again need to be renewed to seek efforts to develop level playing field towards ahealthier market.
While the rationale for the individual project partners may be compelling in eachcase – the customer getting a product at low cost, the builder being able to keepup operation and avoiding more costly idle factories – the outcome for the entire
maritime business community is devastating: shipping suffers from too manyships, pressing down freight and charter rates. Shipbuilding maintains unneeded
production capacity in the hope of a market recovery to arrive soon. This way,
the risk/profit ratio is hopelessly poor, particularly when considering the scopeof complications that may relate to constructing or operating large complex
assets such as ships.
1This practise is not new. On the contrary, it can be traced time and again sincedecades. And despite this being the case, the maritime community has delivered
invaluable services to world trade and with it to global prosperity. However, now
we are called on to undertake yet another major transformation: cease tocontribute to climate change and environment pollution while keeping world
trade seamlessly afloat.
Shipbuilders are eager to tackle this new task, developing new technical solutions
and making best use of the opportunities offered by digitalisation. At the sametime it must be clear that a massive up-scaling of resources to be dedicated tothis important task is a pressing precondition. The same applies to our customers.
Huge investments are needed to develop adequate technology and implement
sustainable shipping.
To this end, profitability of all players involved has to improve significantly. The
industry and academia must address the mechanisms that lead to the current
undesired constellation and must reflect its traditional way of responding toeconomic challenges. At the same time also governments need to review existing
framework conditions for the shipbuilding sector, as they may contributeconsiderably to the described phenomena.
To expect a different outcome from applying the same solution attempt over andover is irrational. Unfortunately, we continue to observe just that time and again.
Overcapacity and low profitability haunt the shipbuilding industry. We call for a
joint effort by all parties involved to address these core problems and thereby
create framework conditions that allow industry to forcefully tackle maritime
sustainability.
Viareggio, 24 October 20192

List of Participants (Japan)#Name

Affiliation

1 Mr. SAITO, Tamotsu

Chairman of the Board (SAJ Chairman)

IHI

2 Mr. TERASAWA, Nobuhiko

Associate DirectorIHI

ManagerIHI

3 Mr. NAKAMURA, Yoshinobu

Senior Corporate Adviser

4 Mr. MIYAJIMA, Koichi

Director

5 Mr. OMIYA, Hideaki

Senior Executive Adviser

Sumitomo Heavy Industries
Sumitomo Heavy Industries
Marine & Engineering
Mitsubishi Heavy Industries

6 Mr. TSUCHIYA, Takashi

Managing Expert

Mitsubishi Shipbuilding

7 Mr. MURAYAMA, Shigeru

Chairman of the Board

Kawasaki Heavy Industries

8 Mr. FUJITA, Shoichiro

Senior Manager

Kawasaki Heavy Industries

Mr. TASAKA, Hideki

Senior Manager

Kawasaki Heavy Industries

9 Mr. KATOH, YasuhikoSenior Advisor

Mitsui E&S Holdings

10 Mr. YASUOKA, ShoManager, London Representative Office

Mitsui E&S Shipbuilding

11 Mr. MISHIMA, Shinjiro

Executive Advisor

Japan Marine United

12 Mr. MAETA, Yoshinori

Director and Managing Officer

Japan Marine United

13 Mr. IWAMOTO, Hiroshi

Counselling Staff

Japan Marine United

14 Mr. YAMAMOTO, Atsushi

Deputy General Manager

Japan Marine United

15 Mr. HIGAKI, Yukito

President

Imabari Shipbuilding

16 Mr. HIGAKI, Kazuyuki

Senior Managing Director

Imabari Shipbuilding

17 Mr. KASHIWAGI, Yoshinobu

Director

Imabari Shipbuilding

18 Mr. KAMICHIKA, Yoshinori

Senior Managing Director

Oshima Shipbuilding

19 Mr. SEBE, MichikazuExecutive Managing Director

SAJ

20 Mr. TSUCHIYA, Toshifumi

General ManagerSAJ

21 Mr. SUZUKI, Takeo

ManagerSAJ

22 Mr. MINATO, Takuya

Director

JETRO London

Mr. MAEJI, KazutoJapan

Position3

List of Participants (Europe and China)#Name

23 Mr. MEYER, Bernard

EuropeAffiliation

Managing Partner (Chairman of Euroyards) Meyer Werft

Mr. MEYER, Tim

Managing Director

Meyer Werft

Mr. WEIGEND, Thomas

Managing Director

Meyer Werft

Chairman

Damen Shipyards GroupMr. BERKVENS, René

Chief Executive Officer

Damen Shipyards Group

25 Mr. BONO, Giuseppe

Chief Executive OfficerFincantieri

26 Mr. MAESTRINI, Alberto

General Manager

Fincantieri

27 Mr. MATARAZZO, Luigi

Executive Vice-President

Fincantieri

28 Mr. CENI, Paolo

Executive Vice-President

Fincantieri

Mr. PIANTINI, Andrea

Director ASSONAVE

Fincantieri

29 Mr. LÜRSSEN, Friedrich

Chief Executive Officer

Lürssen Maritime Beteiligungen

30 Mr. LE JONCOUR, Arnaud

Senior Vice-President (Vice-Chairman of Euroyards)

Chantiers De L’atlantique

31 Mr. BOULAT, Jean-Charles

Vice President EU & NATONAVAL

32DirectorNavantia

33 Mr. VANDER HEYDE, Dave

Chief Executive Officer

ROYAL IHC

34 Mr. DEN HEIJER, Sander

Sector Manager

Netherlands Maritime Technology

35 Mr. LÜKEN, Reinhard

General Managing Director

VSM

36 Mr. TYTGAT, Christophe

Secretary General

SEA EUROPE

37 Mrs. VERHOEVEN, Véronique

Financial & HR Manager

SEA EUROPE

38 Dr. STOTT, Paul

Senior Lecturer

Newcastle University

39 Mr. CHEN, Minjun

Executive Vice Chairman

CANSI

40 Mr. JIN, Peng

Secretory General

CANSI

41 Mr. XIE, Yu

Vice Director

CANSI

42 Mr. SUN, Wei

Vice President

CSSC

43 Mrs. XU, Miao

General Manager Assistant

CSSC

44 Mr. ZHENG, Chengrong

Senior Operations Manager

CSSC

45 Mr. WANG, YanPresident

China Institute of Marine Technology & Economy

46 Mr. HONG, Fangzhi

DirectorChina Institute of Marine Technology & Economy

47 Mrs. ZHAO, Zhen

Engineer

China Institute of Marine Technology & Economy

48 Mr. CHEN, Fuming

Chairman of the Supervisory Board

Shanghai Waigaoqiao Shipbuilding

49 Mr. HU, Keyi

Science & Technology Committee Leader Jiangnan Shipyard

50 Mr. LI, Yunxuan

Project Manager

Jiangnan Shipyard

51 Mr. LIU, Hanjun

Assistant Director

Jiangnan Shipyard

52 Mr. LI, Dong

Chief Engineer

CSSC Huangpu Wenchong Shipbuilding

24 Mr. DAMEN, Kommer

China

Position

Mr. MARTINEZ PEREZ DE ROJAS, Donato

4

List of Participants (China (cont.), Korea and the United States)

Korea

China

#Name

Position

Affiliation

53 Mr. ZHOU, Mushun

Chief Engineer

Guangzhou Shipyard International

54 Mr. ZHU, Hongguang

Deputy Director

China Shipbuilding Industry

55 Mr. LU, Wei

Division Chief of International Dept

China Shipbuilding Industry

56 Mr. WANG, Guohai

President

Qingdao Beihai Shipbuilding Heavy Industry

57 Mr. WANG, Xiaohai

Chairman

Tianjin Xingang Shipbuilding Heavy Industry

58 Mr. ZHANG, Yuhuan

Vice-President

Dalian Shipbuilding Industry

59 Mr. SUN, Chongbo

Senior Engineer

China Shipbuilding Information Center

60 Mr. ZHAO, Zengshan

Vice-President

COSCO Shipping Heavy Industry

61 Mr. PAN, Zhiyuan

Dean of Design & Research

COSCO Shipping Heavy Industry

62 Mr. LEE, Sung Gun

Chief Executive Officer

DSME

63 Mr. PARK, Hyung Gun

Executive Vice-President

DSME

64 Mr. SON, Jin Seck

Director

DSME

65 Mrs. BOK, So YoungManager

DSME

66 Mr. KA, Sam Hyun

President & CEO

Hyundai Heavy Industries

67 Mr. PARK, Seung Yong

Senior Executive Vice-President & COO Hyundai Heavy Industries

68 Mr. YOON, Eui SungSenior Vice-President

Hyundai Heavy Industries

69 Mrs. KIM, Eun Ji

General Manager

Hyundai Heavy Industries

70 Mr. KIM, Woo Jin

Sales Officer

Hyundai Heavy Industries

71 Mr. NAM, Joon Ou

President & CEO

Samsung Heavy Industries

72 Mr. KIM, Kyoung Hyeok

Executive Vice President &CMO

Samsung Heavy Industries

73 Mr. OH, Seong Il

Vice President

Samsung Heavy Industries

74 Mr. YOON, BrianHead of SHI London

Samsung Heavy Industries

75 Mr. MIN, Kwan JoonManagerSamsung Heavy Industries

76 Mr. LEE, Sang Kyun

President & CEO

Hyundai Samho Heavy Industries77 Mr. YUNE, Sung Il

Executive Vice President

Hyundai Samho Heavy Industries

78 Mr. SHIN, Hyeon DaePresident & CEO

Hyundai Mipo Dockyard

79 Mr. PARK, Tae Yung

Vice President

Hyundai Mipo Dockyard

80 Mr. LEE, Byeong Cheol

Vice-Chairman

KOSHIPA81 Mr. KIM, Sung Hyun

General Manager

KOSHIPA82 Mr. KWON, Bong Ki

Senior Manager

KOSHIPA

DirectorGeneral Dynamics NASSCO

USA 83 Mr. WETHERALD, Tom5