At one time shipbuilders in Japan accounted for around half of all new ships built in the world. However, from the 1990s the sector came under increasing competition from rivals in South Korea and China — some shipbuilders in those countries receive government assistance.
As a result, many shipyards in Japan have been closed. Others have merged, or the yards no longer build ships and have shifted into other business areas.
To find out more about how small companies in Japan are dealing with a changing business environment, we sought out Yoshitaka Teramoto, president of Teramoto Iron Works, at the beginning of June. Founded back in 1934, Teramoto Iron Works Co., Ltd. is a small Japanese company located in Onomichi that has strong links to shipbuilding in Japan and has seen the highs and lows in this industry over many decades.
In recent years the company has evolved, and in addition to manufacturing its traditional range of ship fittings, it has branched out into new areas. These include manufacturing fittings for offshore use, producing industrial structures, designing, and fabricating solar panel frames, plus working on innovative renewable energy projects ― including the EnergySail.
In an interview with JAPAN Forward, Teramoto shared his unique insight into the Japanese shipbuilding industry, talked about his family’s company, and its plans for the future.
Excerpts of the interview follow.
Teramoto Iron Works has been in business for a long time and has had to deal with many challenges over the years. Now, in 2020, what do you see as the major challenges your company faces?
Nearly 80% of our products are related to ships. The current work volume we have with Japanese shipyards is very small, less than 1.5 years, and, accordingly, our biggest concern is the downward trend in work volume. In addition, the impact of COVID-19 may accelerate the economic downturn, and I think that we will have to review our management strategy for the future.
The shipbuilding industry in Japan has been struggling over the last few decades and many shipyards have closed and shipbuilders merged. Do you think the worst is behind the shipbuilding sector for now?
I don’t know if this is the worst time, but at least the Japanese shipbuilding sector is expected to continue to undergo a period of change, including consolidation, for a while.
Teramoto Iron Works has a long connection with the shipbuilding industry. But it also has undertaken projects unrelated to shipbuilding. What are some examples of these?
Although it is difficult to include as “shipbuilding,” we have products for merchant ships and work vessels, such as crane ships. Other than shipbuilding, we manufacture products for construction machinery makers.
Also, we have worked on monuments at the request of local artists. These monuments are included as part of a fountain in front of Hiroshima station, at the Fukuyama Museum of Art open space area, and in front of Ochanomizu station.
Recently your company undertook a project to design and build a jack-up rig system for use in the offshore sector. (A jack-up system is a lifting device that raises a work platform above the surface of the water) Can you please briefly describe this system, and also discuss who the potential customers might be?
We manufactured a cylinder and pin type jack-up system with a lifting capacity of up to 5,000 tons (@1,250 tons per leg). Recently, renewable energy solutions have been receiving much attention as an alternative to fossil fuels, and one of these is offshore wind power generation. Our jack-up rig system is the size and type that is in demand for offshore power generation maintenance.
Is Teramoto Iron Works looking to increase exports of its products to markets in Asia and beyond? If so, which countries are you aiming to export to?
We would like to target the European and United States clean energy/eco industry markets.
Recently, in cooperation with Eco Marine Power, Furukawa Battery, and other companies, you established the Onomichi Marine Tech Test Center. What are your plans for this, and can shipyards and other potential customers make arrangements with your company to visit this center?
This center is an exhibition space for our products and has been set up with the expectation of inviting many customers to see our products. We cannot accept visitors by our own decision, but we expect as many customers as possible to visit the center after consulting with our development partners.
Lastly, your company is located in the very scenic city of Onomichi. The city is quite popular with tourists from Japan and abroad, so can you share one thing to see or do in Onomichi that tourists may not know about?
Onomichi has the world-famous cycling course, “Shimanami Kaido.” We hope people will enjoy the scenic beauty of the Seto Inland Sea, and also the food.
For additional information, please see the Teramoto Iron Works Webpage.
Author: Greg Atkinson