Page 107: of Maritime Reporter Magazine (October 1994)

Japanese Industry News

Top Five Japanese Shippers Expected To

Report Dismal Earnings

Reportedly, Japan's five major shipping com- panies are expected to report dismal earnings for the current business year ending March 31, 1995, under the weight of the strong yen and higher fuel prices.

The five companies are Nippon Yusen K.K.,

Mitsui OSK Lines Ltd., Kawasaki Kisen Kaisha

Ltd., Navix Line Ltd. and Showa Line Ltd.

Following are earnings projections for the shipping companies for the current business year. Figures are in billions of yen, with results of the previous year in parentheses.

Company Sales Operating Pretax

Profit Profit

Nippon Yusen 530.0 (531.1) 9.0 (6.54) 7.0 (6.0)

Mitsui 445.0 (440.8) 5.0 (3.7) 2.0(1.6)

Kawasaki 340.0 (335.7) 7.0 (2.3) 1.0 (-0.5)

Navix 140.0(140.2) 1.4 (0.3) 0 (0.8)

Showa 76.0 (76.9) -1.7 (-1.6) -2.5 (-2.4)

NOTE: Minus mark indicates loss

Japanese Shipbuilders Cut Design Costs

To Save

Several Japanese shipbuilders are restruc- turing design operations to cut costs in an effort to battle the effects of the yen's steady growth and competition with shipbuilders in South Ko- rea.

Hitachi Zosen Corp. is hoping to cut its design costs in half by March 1996 by making full use of its intra-company computer network to link de- signing operations nationwide.

Mitsubishi Heavy Industries Ltd. is cutting its ship design staff by half and reassigning the other half to develop probes for submarine re- sources and other equipment.

Mitsui Engineering and Shipbuilding Co. is relocating half the design staff at its head office to outlying shipyards, where business expenses are lower.

Many shipbuilders are also introducing a com- puter system linking designing and shipbuild- ing operations to control parts and component supplies.

Japanese Steelmakers May Abandon

Price Hike

A planned increase in the price of steel by

Japanese steelmakers may do a complete turn- around, as they attempt to combat imports from other industrial nations with cheaper prices.

The intended increase would affect automobile and shipbuilding industries the most, as they account for approximately 70 percent of all steel demand.

The decision to increase prices for steel sold through trading companies and wholesalers to ordinary users came in late August. It was hoped the measure would improve lagging busi- ness. Total steel production will reach 100 million tons in 1994 for the first time in three years, a sign of a recovering economy and, to the steelmakers, a sign of hope for higher prices. But the automobile and ship builders are trying to lower steel prices - and since prices for steel from other sources such as South Korea can be as much as 20 percent lower than those for Japanese steel, they may succeed in forcing Japanese steelmakers into a price drop.

Steelmakers will reportedly try to make gradual cuts, staving off major measures until FY '96, when restructuring will make cuts less severe.

Japan's Techno-Superliner Progressing

The development project for the Techno-Su- perliner (TSL), a high-speed cargo ship expected to play a leading part in high-speed marine transport in the future, has technical targets to have a speed of 50 knots; payload of about 1,000 tons; cruising range of 500 sea miles or more; and seaworthiness enabling it to safely navigate rough seas up to Sea State 6.

This R&D project was launched in FY 89, and the basic aspects of technical R&D work were substantially completed by FY 92. Steady progress has been made, and the Technological Research

Association of the Techo-Super liner is confident that the targets will be reached. Two hull types have been developed specifically for the project: a hydrofoil-type hybrid hull (TSL-F), and an air cushion-type hybrid hull (TSL-A).

Sea tests are scheduled to be carried out for data unavailable from tank tests. Two model ships were built, one for each hull type. The TSL-

F hull type is represented by the model Hayate, and the TSL-A type by the model His ho. The

Hayate was built jointly by five Japanese ship- builders at the Kobe Shipyard of Kawasaki Heavy

Industries, and the work to build the Hisho was split between Mitsui Engineering & Shipbuild- ing and Mitsubishi Heavy Industries.

Europa Cruises Assumes Operation Of

Its Casino Concessions; Acquires New

Vessel For Day Cruises

Europa Purchases Star Dancer

Europa Cruises Corp. paid $3.5 million tJ

Lagoon Cruise Line, Inc. of Panama City, Fla. fo: the Star Dancer.

Europa will minimize operating losses by us ing the Star Dancer as a day cruise vessel whei its two other vessels have to be placed in drydocl for annual maintenance. Europa will ultimatel; place the Star Dancer in service in either a ne\ domestic or a new international market.

Europa Takes Over Its Casinos

Europa has assumed responsibility for operg tions of the casino concessions on its day cruis vessels. The concessions were previously run b

Casinos Austria Maritime Corp. of Madeira Bead

Fla. Under Casino Austria Maritime's manage ment, Europa received 65 percent of net gamin winnings from the casinos. Casino Austria Mar time Received 35 percent for managing, staffin and equipment. When Europa took over mai agement of the casinos in October, Casino Aui tria Maritime retained a 3.5 percent interest i the net gaming winnings from the casinos for i' services as a gaming consultant to Europa.

Employee Stock Ownership Plan

Introduced

In an effort to retain and motivate senii management and other employees, Europa intr duced an Employee Stock Ownership P1e (ESOP). The ESOP borrowed $7.5 million fro

Europa Cruises Corp., which was used to pu chase five million restricted shares in the cor pany.

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